• What is a Special Purpose Entity (SPE) as it pertains to Pennsylvania education tax credits? 

A Special Purpose Entity is a class of pass-through partnerships that exist solely for the purpose of obtaining Education Improvement Credits (EITC/OSTC). 

• Is SPE beneficial to me?

Every situation is unique and Yeshiva’s staff cannot give tax advice. We recommend that you speak with your tax advisor to determine if participating in the SPE program is right for you.

• How much do I give?

The maximum contribution to SPE should be PA taxable income x3.07/90%, or $3411 per $100k of income. The minimum contribution is $1,000

• If I participate in these tax credits, how much will it cost me? 

Upfront you will make a donation obetween $1,000 and the amount of your annual state taxes.  You risk the chance of losing a portion of your EITC tax credit if you choose an amount over your tax liability.  When you file your taxes the following spring you will receive a refund of 90% of your donation from Pennsylvania and a federal benefit based on the remaining 10%. 

• Do I need to earn a particular income to qualify? 

This is based on tax liability, not income, therefore each taxpayer’s situation will differ. You can find your PA tax liability on Form PA-40 Line 12 of your most recent tax return. The minimum contribution is $1,000.

• Can these credits be used on both individual and joint income tax returns? 

Yes.

• When will I receive documents to file with my income taxes? 

Your K-1 forms will arrive in February or March. Your PA K- 1 will list your 90% PA tax credit, which will go on Payment line 23 OC for Other Credit on your PA-40. 

• When will I receive my refund?

Tax returns do go through an additional level of review to match up the credits to the donors, so refunds are normally delayed (July or later).

• Can I designate my contribution to my child’s tuition or a fund of my choice?

No. All contributions go to the school for scholarship purposes.

• Where do I obtain an application/joinder? 

If you would like to participate in the SPE program, email junik@yeshivaschools.com or schedule a call with me

This is for informational purposes only and should not be construed as tax advice.