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2011 Restricted Tax Credits

Keystone Opportunity Zone (KOZ) Program

Keystone Opportunity Zones (KOZ), Keystone Opportunity Expansion
Zones (KOEZ) and Keystone Opportunity Improvement Zones are geographic areas designated by local communities and approved by the state as economic development zones that can provide specific state and local tax benefits.

Qualified businesses and individuals with business activity in such areas may take advantage of tax benefits against the following state taxes:

Capital Stock/Foreign Franchise Tax
Corporate Net Income Tax
Personal Income Tax
Sales and Use Tax
Mutual Thrift Institution Tax
Bank and Trust Company Shares Tax
Insurance Premiums Tax

For more information and to apply for the Keystone Opportunity Zone Program, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Keystone Innovation Zone (KIZ) Tax Credit

The KIZ Program creates designated geographic zones to foster innovation and create entrepreneurial opportunities by aligning the combined resources of educational institutions and the private sector.

Qualified businesses, including pass-through entities, and individuals with business activity in a KIZ may claim this credit against the following state taxes:

Capital Stock/Foreign Franchise Tax
Corporate Net Income Tax
Personal Income Tax

For more information, to apply for a Keystone Innovation Zone Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Special rules apply for taxpayer’s that sell/assign restricted credits. For specific information regarding these rules, review Tax Bulletin 2011-03 on the Department of Revenue’s Web site, www.revenue.state.pa.us.

Job Creation Tax Credit (JCTC)

The Job Creation Tax Credit is available to qualified businesses and individuals creating and sustaining jobs in Pennsylvania.

Qualified businesses, including pass-through entities, and individuals may claim this credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Mutual Thrift Institutions Tax

Bank Shares Tax

Insurance Premiums Tax

Gross Receipts Tax

Title Insurance & Trust Company Shares Tax

Personal Income Tax

For more information and to apply for a Job Creation Tax Credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Research & Development (R&D) Tax Credit

This tax credit is available to businesses and individuals performing qualified research in Pennsylvania, to encourage businesses in the commonwealth to conduct research, especially research of a technological or scientific nature.

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Personal Income Tax

For more information and to apply for a Research & Development Tax Credit, visit Revenue’s Online Customer Service Center at www.revenue.state.pa.us and complete Form REV-545.

To sell/assign/pass-through an R&D tax credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Neighborhood Assistance Program

This program encourages taxpayers to contribute to neighborhood organizations and engage in activities that promote community economic development in impoverished areas.

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Bank Shares Tax

Title Insurance & Trust Company Shares Tax

Insurance Premiums Tax

Mutual Thrift Institutions Tax

Excise Tax on Foreign Corporations

Personal Income Tax

For more information, to apply for a Neighborhood Assistance Program Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Enterprise Zone (EZ) Program

This program broadened the scope of the Neighborhood Assistance Program, promoting job growth and helping municipalities take advantage of business expansion opportunities.

Qualified businesses may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Mutual Thrifts Institutions Tax

Insurance Bank Shares Tax

Insurance Premiums Tax

For more information, to apply for an Enterprise Zone Program Tax Credit or to sell/assign a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Film Production Tax Credit

This tax credit provides an incentive for filmmakers to produce films and television shows in Pennsylvania.

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Personal Income Tax

For more information, to apply for a Film Production Tax Credit or to sell/assign/pass-through a credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Resource Enhancement and Protection (REAP) Tax Credit

This program provides a tax credit to farmers and businesses that invest in the implementation of best management practices in agricultural operations to enhance farm production and protect natural resources.

Qualified businesses, including pass-through entities, and individuals may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Bank Shares Tax

Title Insurance & Trust Company Shares Tax

Insurance Premiums Tax

Mutual Thrift Institutions Tax

Personal Income Tax

For more information, to apply for a Resource Enhancement and Protection Tax Credit or to sell/assign/pass-through a credit, visit the Department of Agriculture’s Web site at www.agriculture.state.pa.us, or call 717-787-8821.

Educational Improvement Tax Credit (EITC)

This program provides tax credits to eligible businesses contributing to scholarship organizations (including pre-kindergarten scholarship organizations) and educational improvement organizations, in order to promote expanded educational opportunities for students in Pennsylvania.

Qualified businesses, including pass-through entities, may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Bank Shares Tax

Title Insurance & Trust Company Shares Tax

Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)

Mutual Thrift Tax

Personal Income Tax

For more information and to apply for an Educational Improvement Tax Credit, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448

To make an irrevocable election to pass-through an EITC to partners, members or shareholders, a business should visit the Department of Revenue’s Web site at www.revenue.state.pa.us and complete Form REV-1123 CT. A separate election must be completed for each year the credit is awarded and not used in whole or in part.

Organ and Bone Marrow Donor Tax Credit

This tax credit expired Dec. 31, 2010. Although no new tax credits are being issued, carry forward of unused tax credits is allowed for three taxable years until 2013.

Qualified businesses, including pass-through entities, may apply the credit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Bank Shares Tax

Title Insurance & Trust Company Shares Tax

Insurance Premiums Tax (excluding surplus lines, unauthorized, domestic/foreign marine)

Mutual Thrift Institutions Tax

Personal Income Tax

For more information, visit the Department of Revenue Web site at www.revenue.state.pa.us.

Strategic Development Area (SDA) Program

This program provides tax benefits to eligible businesses whose business activities contribute to economic development and foster growth in designated areas.

Qualified businesses, including pass-through entities, may apply the tax benefit against the following state taxes:

Capital Stock/Foreign Franchise Tax

Corporate Net Income Tax

Personal Income Tax

Insurance Premiums Tax

Gross Receipts Tax

Bank Shares Tax

Mutual Thrift Institutions Tax

Title Insurance & Trust Company Shares Tax

For more information and to apply for the Strategic Development Area Program, visit the Department of Community and Economic Development’s Web site at www.newpa.com, or call the DCED Customer Service Center at 1-800-379-7448.

Coal Waste Removal and Ultraclean Fuels Tax Credit

A tax credit is available for qualifying capital expenditures on facilities producing fuels from coal, culm or silt. The credit can be used against sales and use tax, corporate net income tax and capital stock/foreign franchise tax.