Opportunity Scholarship Tax Credit Program (OSTC – Previously Known As EITC 2.0)


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.

Business Application Timeline

Tax credits to eligible businesses contributing to a Scholarship Organization, an Educational Improvement Organization, and/or a Pre-Kindergarten Scholarship Organization.

  • May 15 – Business applicants who have fulfilled their 2-year commitment and wish to reapply in FY 15/16 to renew their 2-year commitment.
  • May 15 – Businesses who are in the middle of their 2-year commitment.
  • July 1 – All other businesses including Pre-K business applications. Beginning in FY 15/16 business firms may agree to provide the same amount of contribution to a Pre-K scholarship organization for two consecutive years.

Pass-through entities, such as S-Corporations, Partnerships, LLCs, etc., can now apply the same day as C-Corporations. Applications must be submitted electronically using DCED’s Single Application for Assistance. See the business application guide in the box above.

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 $75,000 plus $15,000 for each dependent member of the household. For the 2014-15 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. 


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 for Fiscal Year 2013-2014 is $50 million.


Businesses authorized to do business in Pennsylvania who are subject to one or more of the following taxes:

  • Personal Income Tax
  • Capital Stock/Foreign Franchise Tax
  • Corporate Net Income Tax
  • Bank Shares Tax
  • Title Insurance & Trust Company Shares Tax
  • Insurance Premium Tax (excluding surplus lines, unauthorized, domestic/foreign marine)
  • Mutual Thrift Tax
  • Malt Beverage Tax
  • Retaliatory Fees under section 212 of the Insurance Company Law of 1921


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.

How to Apply

Pennsylvania businesses can begin applying for Opportunity Scholarship Tax Credits through DCED’s electronic single application 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 Single Application. The application process is listed in the guidelines.

The list of approved Opportunity Scholarship Organizations can be found on the Parents/Student FAQ page.

Additional Information

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 at www.education.state.pa.us

List of Opportunity Scholarship Organizations
View the list of Opportunity Scholarship Organizations