Get 90% of your donation BACK at tax time!
SPECIAL PURPOSE ENTITY (SPE) LLC makes INDIVIDUAL GIFTS TO CROSSROADS
eligible for the Opportunity Scholarship Tax Credit (OSTC)
It may sound like it's too good to be true - but it REALLY IS! When you make an individual donation to Crossroads through our SPE LLC, you get 90% back when you file your Pennsylvania tax return. See below for a sample calculation, and a step-by-step on how easy it is to participate in this TOTALLY WIN-WIN WAY of helping our youth.
Sample donation: $10,000
Dollar-for-Dollar PA tax credit with a 2-year commitment: $ 9,000
Estimated Net Federal Tax reduction based on 35% tax rate: $ 350
Estimated Cost to you: $ 650
How is this possible?
In 2014, the State of Pennsylvania passed House Bill 91, which allows for the formation of Special Purpose Entities (SPE) for the sole purpose of participating in the Pennsylvania Educational Improvement Tax Credit (EITC) or Opportunity Scholarship Tax Credit (OSTC) programs. Crossroads has formed one of these SPEs for the express purpose of accepting OSTC gifts from qualifying individuals.
To qualify, you need to BOTH work for a business paying PA business taxes AND meet one of the two personal income criteria described below:
- My individual income exceeded $200,000 in each of the two most recent years or my joint income together with my spouse exceeded $300,000 in each of those years AND I reasonably expect to earn individual income of at least $200,000 this year or joint income with my spouse of at least $300,000 this year; OR
- My individual net worth or my joint net worth together with my spouse exceeds $1,000,000.
I'm Interested! - What do I do now?
- To participate, you need to become a member of the applicable Crossroads Scholarship LLC by signing an agreement that states you agree to make a two-year commitment to fund the LLC.
- Each member must agree to make the same donation amount for two consecutive years to retain the 90% tax credit. 2019 donations can be made through December 31, 2019 and 2020 (2nd-year) donations must be made by Nov. 1, 2020.
- There is no minimum donation amount required to participate but most participants base the donation amount on what they estimate their 2018 and 2019 tax liabilities to total.
- The applicable Crossroads Scholarship LLC will then receive a DOLLAR-FOR-DOLLAR PA TAX CREDIT EQUAL TO 90% of the donation amount. (This is a DOLLAR-FOR-DOLLAR reduction of PA state tax liability.)
- These credits will then be distributed in late February to the donating members on a K-1 Form.
- The credits can then be applied to your PA tax liability by your accountant when filing your return. There may also be additional benefits to your Federal Tax liability as they relate to Alternative Minimum Tax. Consult your tax adviser to maximize your overall potential tax savings.
- At the point the 2nd consecutive annual donation is made by November 1, 2018, the obligations of the individual members are complete for that 2-year cycle. These individuals may choose, however, to re-join the LLC for another consecutive two years to continue their impact on our mission.
- For more info or to sign up today, contact Brendan Avila at 412-661-9422, Ext. 204 or firstname.lastname@example.org.