Pennsylvania Scholarship Granting Organizations

Pennsylvania's Scholarship Tax Credit programs

Pennsylvania operates two tax credit scholarship programs — the Educational Improvement Tax Credit (EITC) established in 2001 and the Opportunity Scholarship Tax Credit (OSTC) established in 2012. Both are administered by the Pennsylvania Department of Community and Economic Development (DCED). Together they form the second-largest tax credit scholarship program in the nation with a combined annual cap of $680 million (FY 2025-26) and serve over 85,000 students annually.

The key difference: EITC is open to any income-eligible student statewide, while OSTC is limited to students who reside within the attendance boundary of a low-achieving public school (bottom 15% by state test scores).

Am I eligible?

Your child may qualify if:

• Household income at or below $116,055 plus $20,428 per dependent member of the household (adjusted annually for inflation). For a family of four with two dependents, the limit is approximately $156,911.
• Students with disabilities: Eligible if family income is at or below 150% of the baseline income level
• Students with severe disabilities (enrolled in special education schools): Eligible if family income is at or below 299% of the baseline income level
• OSTC additional requirement: Your child must reside within the attendance boundary of a public school on PDE's low-achieving school list (bottom 15% by PSSA/Keystone exam scores). PDE publishes this list annually.

Priority placement — Scholarship Organizations must give preference to:

1. Students who received a scholarship in the prior year (renewal priority)
2. Students whose household income does not exceed 185% of FPL (~$59,500 for a family of four)

Military combat zone compensation, COVID-19 government relief payments, and hospitalization/disability payments are excluded from the income calculation.

How much can my child receive?

• Covers tuition and school-related fees at a Pennsylvania school (including fees at special education schools)
• OSTC also covers district transportation costs
• Scholarship cannot exceed actual tuition charged by the school
• Awards are typically partial — the statewide average was $2,659 in 2022-23

Demand is high: in 2022-23, nearly 80,000 student applications went unfunded due to program caps — almost 1 in 2 applicants.

How to apply

Each Scholarship Organization manages its own application process — there is no centralized state portal for families. Pennsylvania has over 200 approved Scholarship Organizations.

1. Verify your eligibility — confirm household income and, for OSTC, check if your child's assigned public school is on PDE's low-achieving school list
2. Find a Scholarship Organization — DCED publishes the approved list at dced.pa.gov/scholarship-organizations
3. Contact the Scholarship Organization and complete their application process
4. Provide income verification and other required documents
5. If approved, scholarship funds are sent directly to the school

Browse the Scholarship Organizations listed on this page to find one serving your area.

How the tax credit works

Pennsylvania's EITC and OSTC provide tax credits to businesses that donate to approved Scholarship Organizations. Individual donors participate through Special Purpose Entities (SPEs) — LLCs formed specifically for EITC/OSTC donations, which pass credits through to members.

• Maximum credit per entity: $750,000 per taxable year (regardless of credit rate)
• Eligible taxes: Corporate Net Income Tax, Personal Income Tax (via SPE), Insurance Premium Tax, Bank Shares Tax, and several others
• No carry-forward: Credits not used in the tax year cannot be carried forward, carried back, or transferred (exception: pass-through entities may elect to apply unused credits to owners' tax liability in the immediately following year)
• No statutory minimum donation — in practice, SPEs set their own minimums (typically $2,500-$5,000)

The combined statewide cap is $680 million for FY 2025-26 (~$590M EITC + ~$90M OSTC).

How to donate

Businesses must reserve credits through DCED's Enterprise eGrants System before donating. Credits are approved on a first-come, first-served basis by day submitted.

1. Apply through the Enterprise eGrants System to reserve your tax credits
2. Receive approval from DCED
3. Make your donation to your chosen Scholarship Organization within 60 days of the approval letter
4. Submit proof of contribution to DCED within 90 days of the approval letter
5. Claim the credit on your Pennsylvania tax return

For individual donors: Participate through a Special Purpose Entity (SPE). SPEs are LLCs formed specifically for EITC/OSTC donations — credits flow through to individual members' PA personal income tax liability.

Important: Donors cannot designate a specific student — this is prohibited by law and can result in removal from the program. Donors may designate their donation to a specific school or organization.

Program impact

Pennsylvania's programs have grown substantially, with the combined cap more than tripling since 2017-18.

Over 200 Scholarship Organizations operate across all 67 Pennsylvania counties. The program has seen consecutive annual cap increases since 2022, with $680 million available for FY 2025-26.