100 % of all EITC gifts made to Wyndcroft through the Central Pennsylvania Scholarship Fund support low- and moderate-income scholarships at Wyndcroft. The students who receive these scholarships can do Wyndcroft-level work and can thrive here.  The CPS Fund is staffed by volunteer CPA’s and attorneys. It charges no fees.

The Central Pennsylvania Scholarship Fund administers the LLC’s that receive EITC gifts and pass them through to Wyndcroft. The CPS Fund has set the minimum EITC gift in any calendar year at $3500. A $3500 EITC gift will earn you a 90% tax credit of $3150 against your Pennsylvania taxes.

The LLC sends you a Pennsylvania K-1 in February so you can claim your tax credit for the gift you made in the prior year.

The Central Pennsylvania Scholarship Fund will send you a Federal K-1 so you can claim your Federal deduction. 

Not yet. If the new Federal Education Freedom Scholarship bill is passed, the Central Pennsylvania Scholarship Fund (CPS Fund) that runs the LLC’s will be a “qualified organization” under the new law. The CPS Fund will then make the Federal tax credits under the new law available to you. For now, the LLC you joined will send you a K-1 to substantiate your Federal tax deduction.   

A tax credit reduces your tax, dollar for dollar.

A tax deduction reduces your taxable income. Your tax is a percentage of your taxable income.

A $1000 tax credit saves you $1000 on your taxes. A $1000 tax deduction saves you only $370 ($1,000 x 37% maximum federal tax rate).

Here’s another example. You get a 90% EITC tax credit for your Pennsylvania taxes.  As an individual taxpayer you get a Federal tax deduction for the remaining 10% of your EITC gift. So when you use the EITC, the out-of-pocket cost of your gift would be at most 6.3% of your total gift if you’re in the 37% Federal tax bracket.  Why? The Pennsylvania EITC tax credit pays for 90% of your gift, and your Federal tax deduction pays for 3.7 % (10% of 37%) of your gift not covered by the EITC.

By contrast, your out of pocket cost for a gift if you don’t use the EITC would be 63% of the gift. You’d get at most the 37% Federal tax deduction, but no Pennsylvania tax credit.

Joinders are accepted on a rolling basis. To be sure you get your tax credits in a given year, make your EITC gift during the Spring Round from January to May or during the Fall Round from June to October. The supply of tax credits runs low towards the end of the Fall Round, so it's best to send us your Joinder as soon as you're sure of your plans. To reserve your tax credits, just call, email, or stop by the Wyndcroft Development Office to get your simple one-page Joinder, fill it in, and send it back to us to ensure that there are credits for you.  We’ll send your Joinder to the Central Pennsylvania Scholarship Fund, which will invoice you for the gift within 30 to 45 days of receiving your Joinder.

A signed Joinder isn’t legally binding. When you sign a Joinder you’re just reserving space in an LLC to make your EITC gift. The Central Pennsylvania Scholarship Fund will invoice you for the gift amount you wrote in the space provided on your Joinder. The CPS Fund sends you your invoice when the State issues its award letter to the Fund.

Then you need not participate. Just let the Wyndcroft Development Office know that your plans have changed. The Central Pennsylvania Scholarship Fund will then simply reassign those tax credits to the next donor who needs them.  But once you send in your check then you’ve got a tax credit that you must use for the tax year in which you made the gift.  The credits are “use them or lose them.”

When you get the gift invoice from the CPS Fund you can adjust your gift up or down, or simply not participate in EITC at all.  Just let the Wyndcroft Development Office know that your plans have changed. Your Joinder is just a reservation, not a binding commitment.

Yes. Once you have an approved Joinder you should be able to stop or reduce your estimated tax payments.  Contact Randy Tarpey, CPA, volunteer president of the Central Pennsylvania Scholarship Fund, at randytarpey@hksickler.com or (814) 682-9038 to make sure your Joinder will be approved and the CPS Fund still has guaranteed current year tax credits available. 

Does my accountant just send in a copy of the K-1 from the LLC as my estimated payment to Pennsylvania?

No need. The gift and the EITC tax credit backdate in the Pennsylvania tax system to the full year in which you made the gift even if you make your gift on December 31^st.  Once you’re in the EITC program, then you don’t pay installments, or you pay smaller installments. You just file your K-1 with your Pennsylvania tax return.

If I can NOT claim EITC tax credits against part of my Pennsylvania estimated quarterly tax payments, how much will I pay in penalties for not paying my State estimated payments on time?

The tax credit acts as a payment and eliminates any penalties as long as you have enough tax credits to pay the Pennsylvania tax you owe.  Any penalty would be due only on any additional amount you owe beyond what’s covered by the EITC. You’d need to make estimated tax payments to cover that additional amount.  You apply your EITC credit when you’re doing your tax returns for the year just ended.

Yes. You’ll be invoiced for your gift in the same year in which you file your Joinder, and your tax credit will apply to that year.

Won’t happen. You’ll be invoiced in the current year when the CPS Fund gets the award letter from the Commonwealth of Pennsylvania.  The CPS Fund rejects new Joinders if it is “full” and can’t invoice for them in the current year.  In 2018 the Fund used up all its credits by December 11 and didn’t accept new Joinders again until early 2019. In 2019 the credits were gone by November 22^nd.

So the year in which I actually write the check is also the year in which I get my EITC tax credit?

Yes.

No problem! That’s one of the benefits of making your EITC gifts to Wyndcroft through the Central Pennsylvania Scholarship Fund. If you choose not to participate the second year the CPS Fund will give the tax credit you don’t use to another donor. You won’t be penalized.

Check with your matching gift program administrator. It’s possible that your company will match the 10% of your gift that’s not covered by the EITC tax credit.

Yes!

Wyndcroft protects your confidentiality by not publishing the amount of your EITC gift. Just let us know when you send us your Joinder. We can list you as participating in the EITC program without disclosing an amount.

The Central Pennsylvania Scholarship Fund has 23 Special Purpose Entity LLC's that guarantee you a tax credit when you complete a Joinder for any one of them.  If there’s no space in one LLC, one of the other 22 LLC's will step in and fulfill your tax credit order.  As long as you are an existing donor or a new donor who files a timely Joinder, and you make your donation when the CPS Fund invoices you, you are assured that you have a current year tax credit.