Student Funding

Each approved organization determines scholarship amounts. Tax credits are worth 75 percent of the contribution; however, a 90 percent credit can be claimed if the corporation commits to two consecutive annual contributions (with recent pandemic-related legislation allowing companies more time to donate to benefit from the 90 percent credit as well as carry credits forward two additional years). In either case, the maximum tax credit is $750,000 per company; however, this cap is lifted from October 1 through November 30 during years where there are unclaimed credits. Credits are awarded to companies on a first-come, first-served basis until the $325 million cap is reached.

(Last updated December 18, 2023)  

Student Eligibility

Children are eligible for scholarships if their household incomes are less than $105,183 plus $18,514 for each child in the family in 2022–23. For example, a family with one child must have an income below $123,697, whereas a family with three children must have an income below $160,725. The figures increase in subsequent years to account for inflation. Students with special needs are eligible for scholarships if they come from families who earn 150 percent of the baseline income level (for example, a family with one child may earn up to $185,545 in 2022–23) or less, and those with the most severe special needs who are enrolled in special education-specific schools are eligible if they come from families who earn 299 percent of the baseline income level ($369,854 for a one-child family in 2022–23) or less.

(Last updated December 18, 2023)

EdChoice Expert Feedback

Pennsylvania’s Educational Improvement Tax Credit program helps tens of thousands of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity.

Eligibility for the scholarships is limited to students from low- and middle-income families. Almost three out of four Pennsylvania students are eligible for a scholarship, but less than five percent of students statewide actually use a scholarship from one of Pennsylvania’s two tax-credit scholarship programs (including the Opportunity Scholarship Tax Credit program).

The average scholarship size is about $2,600, which is only about 15 percent of the average expenditure per student at Pennsylvania’s district schools. Tax credits are worth 75 percent to 90 percent of the value of the contributions to scholarship organizations, but only $263 million in tax credits are available for K–12 scholarships annually, which is equivalent to only 0.42 percent of Pennsylvania’s total K–12 revenue.

To expand access to educational choice, Pennsylvania policymakers should dramatically increase the available tax credits and expand eligibility to all students (prioritizing scholarships based on need). The program could also be converted into an education savings account to ensure that all students have access to the education that’s the right fit for them, whether private school or a customized course of education.

Pennsylvania’s scholarship program generally avoids unnecessary and counterproductive regulations.

(Last updated December 18, 2023)

Rules and Regulations

• Income Limit: $105,183 plus $18,514 per child (higher for students with special needs) 
• Prior Year Public School Requirement: None
• Geographic Limit: Statewide
• Enrollment Cap: None
• Scholarship Cap: Full tuition
• Testing Mandates: None
• Credit Value: 75 / 90 percent
• Per Donor Credit Cap: $750,000
• Total Tax Credit Cap: $325 million for K –12 scholarships (plus $30.5 million for prekindergarten scholarships, and $54.5 million for Education Improvement Organizations)   

SO Requirements:

• Use at least 90 percent of contributions for scholarships
• Make scholarships available for more than one school
• Submit an annual report detailing donations received and scholarships awarded and proof of a financial review by a certified public accountant
• Verify applicants’ income information

(Last updated December 18, 2023)

Governing Statutes

24 Pa. Const. Stat. §§ 20-2001-B through 2013-B

(Last updated December 18, 2023)  

Legal History

No legal challenges have been filed against the program.

(Last updated December 18, 2023)