Opportunity Scholarship Tax Credit Program (OSTC)

Opportunity Scholarship Tax Credit Program (OSTC) is sponsored by Pennsylvania Department of Community & Economic Development (DCED). Provides tax credits to eligible businesses contributing to Opportunity Scholarship Organizations, which then offer tuition assistance to students residing within the boundaries of low-achieving schools.

Opportunity Scholarship Tax Credit Program (OSTC) - PA Department of Community & Economic Development Opportunity Scholarship Tax Credit Program (OSTC) The program provides tax credits to eligible businesses contributing to an Opportunity Scholarship Organization.

Business contributions are then used by Opportunity Scholarship Organizations to provide tuition assistance in the form of scholarships to eligible students residing within the boundaries of a low-achieving school to attend another public school outside of their district or nonpublic school. Notice to all OSTC non-profit organizations.

Please review the updated eligibility section of your respective organization guidelines regarding an increase to the expenditure requirements of the OSTC program beginning with the 24/25 fiscal year. Upcoming School Year 25/26 EITC/OSTC Reporting Requirements: Identify whether a scholarship recipient was an eligible student with a disability. Along with the grade level of the recipient (K-8) or (9-12).

Dollar amount of each individual scholarship award Name of each scholarship recipients school district of residence. Name of the school that each recipient attended. Reporting begins with the 25/26 school year.

Renewal reports due November 2026. Format to be provided by DCED. 2024-2025 OSTC Business Participants How to apply for a scholarship Application Guide for Businesses The program provides tax credits to eligible businesses contributing to an Opportunity Scholarship Organization.

Business contributions are then used by Opportunity Scholarship Organizations to provide tuition assistance in the form of scholarships to eligible students residing within the boundaries of a low-achieving school to attend another public school outside of their district or nonpublic school.

A low-achieving school is defined as a public elementary or secondary school ranking in the bottom 15 percent of their designation as an elementary or secondary school based upon combined math and reading Pennsylvania System of School Assessment (PSSA) scores. View the list of Opportunity Scholarship Organizations. Business Application Timeline Tax credits to eligible businesses contributing to an Opportunity Scholarship Organization.

May 15-June 30: Business applicants who have fulfilled their 2-year commitment and wish to reapply in FY 25/26 to renew their 2-year commitment. May 15-June 30: Businesses who are in the middle of their 2-year commitment. July 1: All other businesses including initial applicants and those applicants wishing to submit an additional application on top of their previously submitted 2-year commitment.

If you did not submit the tax clearance form during the application process, you can still do so through the PA Department of Revenue website.

For Parents, Students and Opportunity Scholarship Organizations Students who live within the attendance boundaries of a low-achieving school, as determined by the Pennsylvania Department of Education, are eligible to receive a scholarship if their household’s annual income is no greater than $116,055 plus $20,428 for each dependent member of the household.

For the 2025-26 school year, the maximum scholarship award available to non-special education students is $8,500 and the maximum for a special education student is $15,000. Tax credits may be applied against the tax liability of a business for the tax year in which the contribution was made.

The tax credits awarded to businesses will be equal to 75 percent of their contribution amount, which can be increased to 90 percent upon the business committing for two years. The total may not exceed $750,000 per taxable year.

Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes: Capital Stock/Foreign Franchise Tax Title Insurance & Trust Company Shares Tax Insurance Premium Tax (excluding unauthorized, domestic/foreign marine) Tax credits equal to 75 percent of its contribution up to a maximum of $750,000 per taxable year; can be increased to 90 percent of the contribution, if a business agrees to provide same amount for two consecutive tax years.

Total program funding is $50 million.

An approved company must provide proof to DCED within 90 days of the notification letter that the contribution was made within 60 days of the notification letter; Tax credits not used in the tax year the contribution was made may not be carried forward or carried back and is not refundable or transferable, except for an approved election by a pass-through entity to apply any unused tax credits to the tax liability of the owners in the taxable year immediately following the year in which the contribution is made.

Pennsylvania businesses can begin applying for Opportunity Scholarship Tax Credits through the Enterprise eGrants System . DCED will no longer require applicants to mail the signed signature page. The business application guide explains the process of applying.

Tax credit applications will be processed on a first-come, first-served basis by day submitted. All applications received on a specific day will be processed on a random basis before moving on to the next day’s applications. Applications will be approved until the amount of available tax credits is exhausted.

Applicants interested in applying as an Opportunity Scholarship Organization can apply at DCED Center for Business Financing, Tax Credit Division, 4th Floor, Commonwealth Keystone Building, 400 North Street, Harrisburg, PA 17120: (717)-787-7120 or RA-EITC@pa. gov . Do not use the Enterprise eGrants System.

The application process is listed in the guidelines . The list of approved Opportunity Scholarship Organizations can be found on the Parents/Student FAQ page . Opportunity Scholarship Tax Credit Program (OSTC) Frequently Asked Questions Finding Underperforming Schools The Pennsylvania Department of Education is responsible for maintaining a list of the lowest 15 percent of underperforming schools within the commonwealth.

This information can be accessed on the Department of Education website .

List of Opportunity Scholarship Organizations View the list of Opportunity Scholarship Organizations Opportunity Scholarship Tax Credit – Economically Disadvantaged Schools An Economically Disadvantaged School is defined as any school within this Commonwealth at which at least 75% of the students attending the school in the preceding school year received an Opportunity Scholarship tax credit award.

The Department is authorized to approve only one Opportunity Scholarship Organization – Economically Disadvantaged Schools per year. Manufacturing PA Industrial Resource Center Program Waterfront Development Tax Credit Program (WDTC) Ben Franklin Technology Development Authority COVID-19 Venture Loan Program (BCVL) Sewage Facilities Program (SFP) Alternative and Clean Energy Program (ACE)