Many of you may be wondering what is up with your EITC application and tax credits.
Unfortunately, the EITC program is a part of the state budget. At this point, our governor and legislation have not been able to come to an agreement on the budget. As such, participation in the program cannot be approved by DCED and the award letters are not being mailed.
At this point, it does not appear that the program is in jeopardy. However, the legislation is talking about passing a partial budget so that social services and education services can be funded. What is unknown is whether or not the EITC would be included in this partial budget or would be held out as a special project.
IMPORTANT – ALL PARTICIPANTS
- Do not make a contribution under the program until you have received the award letter from DCED. Contributions made prior to the award letter may not be accepted by the state.
- Contact us as soon as you have received your award letter. Depending upon your fiscal year (see below), you could have only a day or two to make your contribution.
IMPORTANT – Business with fiscal years ending between 9/30/15 and 11/30/15.
If the budget does not pass before the end of your fiscal year, you will be ineligible to receive the tax credits. Your tax planning assumed that these corporate or personal credits will be available. This means you may be forced to pay significant personal or business taxes to the state immediately and may be subject to underpayment penalties and interest.
Assuming you are approved to participate in the program, you will be able to use your credits in the following tax year. However, it will create a timing issue where you essentially will not be participating in the program during one tax year.
IMPORTANT – Business with fiscal years ending on 12/31/15
The budget impasse is not currently a significant issue for you. In the event the budget crisis extends into December, it could become a problem in the future, but we don’t anticipate that this would occur.
If you have any questions on this matter, please contact us immediately!
Hershey Advisors PC