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New federal tax loophole could stoke interest in private school donations in Pa.

changing class middle school
Jessica Kourkounis for WHYY

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

Changes to the federal tax code could encourage more Pennsylvania businesses to pump money into K-12 private schools instead of paying state taxes.

That’s according to an analysis by the nonprofit Institute on Taxation and Economic Policy (ITEP), which says it discovered an expanded loophole in the new law.

By cross-referencing federal and state incentives, ITEP concluded that wealthy individuals and high-profit businesses across 10 states — including Pennsylvania — may actually make money when they donate to private school scholarship funds.

This would seem like welcome news to the Commonwealth’s private schools and a blow to public schools. At least in the short term, though, it’s unclear whether private schools would receive any benefit, even as their benefactors make a handsome profit.

Read the rest of this article at WHYY News

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