Pennsylvania's EITC & OSTC: Corporate Tax Credits for Military School

Pennsylvania's Scholarship Tax Credits

Pennsylvania offers two powerful programs that allow businesses to redirect their state tax liability toward private school scholarships: the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC).

For families considering Pennsylvania military schools, understanding these programs—and finding businesses willing to participate—can significantly reduce tuition costs.

How the Programs Work

The Basic Concept: Instead of paying state taxes to Pennsylvania's general fund, businesses can donate that money to approved scholarship organizations. In return, they receive a tax credit of 75-90% of the donation.

The Result:

• Businesses reduce their tax liability
• Scholarship funds receive donations
• Students receive scholarships for private school

EITC vs. OSTC: What's the Difference?

Many families can qualify for both programs, depending on their circumstances.

Pennsylvania Military Schools

Pennsylvania's military schools that may participate in EITC/OSTC scholarship programs:

Valley Forge Military Academy (Wayne)

• Grades 7-12, boarding and day
• Historic campus outside Philadelphia
• Strong JROTC and college prep programs
• Note: Also has a junior college (Valley Forge Military College)

Carson Long Military Academy (New Bloomfield) — Historical

• Closed in 2017 after 180+ years
• Alumni legacy continues through scholarship foundations
• Some scholarship funds may still exist for other schools

Contact Valley Forge's admissions and financial aid offices to identify their participating scholarship organizations.

For Business Owners

If you own a Pennsylvania business, EITC/OSTC offers significant advantages:

Eligible Business Types:

• C-Corporations
• S-Corporations
• LLCs
• Partnerships
• Sole proprietorships (with PA tax liability)

The Math:

A business can donate $10,000 to a military school scholarship fund for less than $1,000 net cost.

How to Participate as a Business

Step 1: Apply to DCED

• Applications open July 1 each year
• Submit through PA Department of Community and Economic Development
• Credits awarded on first-come, first-served basis

Step 2: Receive Approval

• DCED reviews and approves applications
• Receive credit authorization letter

Step 3: Make Donation

• Donate to approved Scholarship Organization
• Must be made within specified timeframe

Step 4: Claim Credit

• Report on PA tax return
• Reduce tax liability by credit amount

Important: Credits are capped and often exhausted quickly. Apply July 1.

For Families Seeking Scholarships

Finding EITC/OSTC Scholarships:

1. Contact the school directly. Ask Valley Forge (or your target school) which scholarship organizations they work with.

2. Apply to scholarship organizations. Each has its own application process, deadlines, and criteria.

3. Meet eligibility requirements:

   • EITC: Household income limits (varies by family size)
   • OSTC: Must reside in low-performing school district

4. Apply early. Scholarship funds are limited.

Common Scholarship Organizations:

• Children's Scholarship Fund of Pennsylvania
• BLOCS (Business Leadership Organized for Catholic Schools)
• School-specific foundations

Income Eligibility (EITC)

EITC scholarships have income limits based on family size:

Income limits are indexed annually. Check current limits with DCED or scholarship organizations.

OSTC: The Low-Performing School District Option

OSTC has different eligibility:

• No income limit for eligibility
• Student must reside in a school district where a school is on the "low-achieving" list
• Higher income families may still qualify if geographic requirement is met

Check if your district qualifies at the PA Department of Education website.

Combining Funding Sources

EITC/OSTC scholarships can be combined with:

• PA 529 Plans: For remaining tuition after scholarship
• School financial aid: Apply for additional need-based aid
• Federal programs: If applicable
• Payment plans: For remaining balance

Questions to Ask Valley Forge

1. "Which EITC/OSTC scholarship organizations do you work with?"
2. "What is the typical scholarship amount available?"
3. "What is the application process and timeline?"
4. "Do you have business partners who participate in EITC?"
5. "What percentage of students receive EITC/OSTC scholarships?"

For Alumni and Supporters

If you're a Pennsylvania business owner and military school alumnus:

• Consider participating in EITC/OSTC
• Your donation costs you pennies on the dollar
• You directly fund scholarships for future cadets
• Contact your alma mater's development office

Timeline

Resources

• PA DCED EITC/OSTC Information
• Valley Forge Military Academy
• Your school's financial aid office

Key Takeaways

1. EITC/OSTC allows businesses to redirect taxes to scholarship funds
2. Business owners can donate $10,000 for less than $1,000 net cost
3. Valley Forge Military Academy likely participates in scholarship programs
4. Families must apply through scholarship organizations, not directly
5. Credits are capped—businesses should apply July 1 when applications open

Next Steps

Explore military school costs and funding options nationwide. Learn how to evaluate military schools during your visit.