Tax tips for South Carolina college students

Tuesday, Feb 21, 2023

FOR IMMEDIATE RELEASE - 2/21/2023

What you need to know:
You may need to file a tax return depending on your gross income and whether or not your parents can claim you as a dependent.
Student-athletes who receive Name, Image, and Likeness (NIL) income should receive a 1099 from each business where they earn income. Even if you do not receive a 1099, you should report all income you earned on your return.
If you have federal taxable income you earned in South Carolina, you should file a South Carolina Income Tax return, regardless of whether you are from out of state or are an international student.

More than 229,000 college students call South Carolina home for at least part of the year, according to the South Carolina Commission on Higher Education, and many may need to file a South Carolina tax return during the tax season.

Whether you earn money from a part-time job or income from your name, image and likeness (NIL) as a student-athlete, or some of your scholarship or grant income is taxable, the South Carolina Department of Revenue (SCDOR) wants to provide college students with information to make informed decisions about any state tax obligations.

General guidance for college students

You may need to file a tax return depending on your gross income and whether or not your parents can claim you as a dependent. Use the IRS's Interactive Tax Assistant to find out if you need to file a tax return and if you can be claimed as a dependent. If you are required to file a federal return with the IRS, you are generally required to file a state return as well. Complete your federal return before starting your South Carolina tax return, since you'll need your federal taxable income.

College can often take students across state lines, which impacts your tax obligations if you earned income at any point during the year. Most students will find themselves in one of three categories:

South Carolina residents attending college in another state must file an SC Individual Income Tax return that includes all of their 2022 income, including income earned in another state. When filing their return, they can claim a credit for taxes paid to another state on the SC1040TC if filing by paper or the tax credits section of their filing software.
Out-of-state residents attending a South Carolina college must file an SC Individual Income Tax return with a Schedule NR that includes all income earned in South Carolina, if applicable. These students are also encouraged to check with the state of their residency to get credit for taxes paid to South Carolina.
South Carolina residents attending an in-state college should file an SC Individual Income Tax return like any other South Carolina taxpayer.

Guidance for international students

In the 2021-22 academic year, international students made up almost 5% of the total enrollment in American higher education institutions. According to the Institute of International Education, over 5,000 international students were present in the state of South Carolina during the 2021-22 academic year.

If you are an F-1 or J-1 student visa holder who files taxes as a nonresident alien, you may have many questions and uncertainties about your tax requirements. Make sure to contact your international student office, which can direct you to tax filing support specifically for nonresident aliens. Here are some additional tips:

If you did not have a source of income from South Carolina during 2022, then you don't need to file a South Carolina tax return. The most common source of student income is wages from a job reported on W-2s or 1099s, including wages from on-campus jobs, graduate assistantships, or off-campus employment authorized by the Department of Homeland Security, such as CPT or OPT employment.
Scholarship money is usually not considered income, unless it's reported on your federal tax return. If you are an international student-athlete on scholarship, make sure to consult with your institution or a tax professional with experience filing nonresident alien tax returns. If you have income sources from other states or countries, the tax agencies from those locations should have more information on filing requirements.
As an international student, your South Carolina residency depends on your domicile, or permanent home. Most international students are in the United States on an F, J, or M visa and are considered nonresidents. However, some international students will be considered resident aliens if they have lived in the United States for more than five calendar years. For more information, visit the IRS's website.
Nonresident international students should file an SC1040 with the Schedule NR. International students who qualify as residents should file an SC1040. Be sure to fill out your federal return before starting your South Carolina tax return, since you'll need your federal taxable income.

Guidance for student-athletes with Name, Image, and Likeness (NIL) income

The 2021 tax year was the first year college student-athletes could receive income based on their NIL while maintaining their NCAA or NAIA eligibility. This new income opportunity for college student-athletes is NOT a change in South Carolina tax law or policy. Here is some additional guidance:

Taxpayers who receive income from NIL should receive a 1099 from each business where they earn income. Even if you do not receive a 1099, you should report all income you earned on your return.
Income earned in South Carolina must be reported on the SC Individual Income Tax return, regardless of the taxpayer's state of residency. Out-of-state residents should see the applicable section above for tips on receiving credit for taxes paid to South Carolina.
For tax purposes, income includes gifts (such as gear) and services the taxpayer received as compensation, not just money.

All college students should learn more about the Tuition Tax Credit

Qualifying students attending a South Carolina college or university can receive a credit up to 50% of tuition paid, limited to $1,500. Visit dor.sc.gov/taxcredits to learn more about eligibility requirements. If you're eligible, use the 2022 Tuition Tax Credit form (I-319) to claim the credit if filing by paper, or the tax credits section of your filing software.

More information

Individual Income Tax returns are due April 18. File your return online and choose direct deposit for your refund as the fastest, safest, and easiest options. For more tips and information about filing Individual Income Tax Returns, visit dor.sc.gov/iit.

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