As a business owner, there are so many incentive programs to try to navigate, including tax credit programs. These programs can often be confusing to someone not familiar with them. That’s why we try to help determine the best programs available for your business, so you are not leaving money on the table! Here is a brief overview of the 4 most popular programs in our region, although PA offers many more. These tax credits can be used to offset PA tax liabilities, or sold for cash back into the company!
Education Improvement Tax Credits (EITC)
The EITC program is the largest year over year program PA offers. It provides a way for businesses, and now even individuals, to redirect their state tax dollars to local private K-12 schools, Pre-K programs, and other Educational Improvement Organizations. You can receive a 90% PA tax credit for your donation with a 2-year commitment, and support the school of your choice!
Keystone Innovation Zone Credits (KIZ)
The KIZ program was established in designated areas to help increase and support innovative start-up and early stage companies. Businesses less than 8 years old developing IP in fields like Manufacturing, Advanced Technologies, Life/biosciences, and Business Services that are located within the zone can receive tax credits up to $100,000 per year based on growth in sales. These credits can be used, sold, and even leveraged to help early stage companies get more financing opportunities.
Research and Development Credits (R&D)
The R&D program provides an incentive for companies in PA to continue developing new products and processes, and improving and adding features to existing products. This could be things like reducing costs, finding better materials or creating something entirely new. There are no age or amount limits, so companies across many industries and experiences can qualify for both a Federal and PA credit each year with continued growth in development areas.
Neighborhood Assistance Programs (NAP)
PA also offers a few programs under the NAP umbrella to support non-profit organizations doing different projects within the year. They can include things like workforce development, crime prevention programs, blight removal, or offering other community services. Depending on the project the organization is awarded an allocation of tax credits based on donation commitments they collect during the application process. Once approved, donations can be made and donors will receive 55-75% back as a Tax Credit depending on the program. Those credits can be used to offset corporate or personal PA tax liability, or sold for cash. The NAP program also sets aside a portion of credits that for-profit developers can utilize to help with financing building projects within Enterprise Zones of up to $500,000 per project.
Other PA Tax Credit Programs
- Opportunity Scholarship
- Video Game
- Resource Enhancement & Protection
- Malt Beverage
- Coal Refuse
Contact us for more information or help navigating any of these programs. We would love to discuss the opportunities available for your business!
1637 E. Pleasant Valley Blvd., Suite 200|
Altoona, PA 16602