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On this page, find answers to frequently asked questions about Withholding Tax and information about refund procedures.
The SCDOR will only issue a Withholding Tax refund if the withholding is overpaid due to a math error or incorrect payment above the amount withheld from the employees. Overpayments will be refunded to the withholding agent if claimed prior to the issuance of original W-2 or 1099 forms.
Refunds are not allowed to the withholding agent due to the issuance of W-2c forms (corrected W-2 forms) which decrease the amount of state tax withheld
Example: An error was made and a payment was submitted for more than the amount of tax withheld.
To amend on MyDORWAY:
To amend by paper:
Taxes withheld from an employee’s paycheck belong to the employee and are held in trust by the employer. Any overpayment will be refunded from the employee’s Individual Income Tax return.
Example: State taxes were withheld for South Carolina in error. The employee actually worked in another state for which the taxes should have been withheld. The W-2 form was issued showing the wages and withholding for South Carolina.
See SC Code Section 12-8-2020 for complete information.
Yes. If your Withholding Tax account is open, you must file quarterly returns even if there was no withholding for the quarter. If you do not file a return, you will receive a Failure to File notice.
Yes. If you file 10 or more South Carolina Withholding returns in a quarter, our Batch Withholding Program is a great option for you. In one file, you can report the information normally submitted on the SC Withholding Quarterly Tax Return (WH-1605) or SC Withholding Fourth Quarter/Annual Reconciliation Tax Return (WH-1606) for multiple clients.
You must apply before you can use this option. Review our Batch Withholding Program Guide for more information on applying as a Batch Filer.
Yes. A Fourth Quarter and Annual Reconciliation Return (WH-1606) is required if a withholding account is open for any portion of the year, because it contains information for the entire year, not just the fourth quarter.
If you need to close your Withholding Tax account, you have two options:
OR
Wages are taxed in the state in which they are earned. If the employee is working in South Carolina, the income earned here is taxed by South Carolina, even if they aren’t a resident—so you should withhold for South Carolina.
Wages are taxed in the state in which they are earned, unless the employee is working in a state that does not withhold state Income Tax.
If the employee is a South Carolina resident and is working in a state that does not have state Income Tax (ex. Florida, Texas, Tennessee), you should withhold South Carolina tax.
Generally, the remote employee’s wages are not taxable to South Carolina since the employee is working and lives outside of South Carolina. However, you may be required to withhold Income Tax from the remote employee’s wages for the state they are physically located in.
Servicemember spouses domiciled in South Carolina are not taxed in South Carolina on personal service income if the spouse elects for tax purposes to use the domicile state of the servicemember or the permanent duty station outside of South Carolina.
See SC Revenue Ruling #24-5 for more information.
Apply for an SC Withholding File Number on MyDORWAY using our Business Tax Application. By registering on MyDORWAY, you may receive your Withholding File Number the same day you register.
Your SC Withholding File Number is a 9-digit number. Reference this number on all returns, correspondence, and any phone calls made to the SCDOR.
Yes, should the ownership of the business change, such as conversion from a partnership to a corporation, you must obtain a new Withholding File Number. If you are required to get a new federal identification number (FEIN), you are also required to get a new SC Withholding File Number.
If your withholding account is open, you must file a quarterly return, even if you had no employees or withholding for the quarter. If you did not file a quarterly return, the SCDOR will mail you an Estimated Assessment Notice for the period. If you are not going to have employees in the near future, we recommend you close your Withholding account as of your last payroll date.
If you have an open withholding account, you are required to file a return, even if you had no employees or withholding for the quarter.
If you submitted a withholding application in error, then the SCDOR recommends that you close your withholding account on MyDORWAY.
You may pay the amount owed online through MyDORWAY. You may also write a check, attach it to a copy of the notice, and mail it to the SCDOR at the address listed on the notice.
Review your copy of the return and verify it is for the same account and quarter listed on the notice. You can file your return and make payments using MyDORWAY. If a payment is due, send the payment along with a copy of the return to SCDOR, or file the return and payment amount due using MyDORWAY. Filing the return electronically or by paper will satisfy the notice.
You may not owe this amount. First, verify the quarter for which the notice was sent. Also, check your records to verify that you made all payments for the quarter.
The notice was sent because the SCDOR did not receive your return, but it does not mean that we did not receive your payments. Once we receive your return (file online using MyDORWAY or mail a paper return to the address on the form), the notice will be satisfied.
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Electronic Payment Options:
Paper Payment Options:
Mail your payment with the Withholding Tax Prepayment Coupon (WH-1601).
New hires are reported at newhire.sc.gov or by calling 1-803-898-9235.
Unemployment questions should be directed to the SC Department of Employment and Workforce.
Questions concerning Contingency Assessments should also be directed to SCDEW.
After the 2020 federal W-4 removed allowances, South Carolina created its own W-4 to include allowances and match our withholding tables.
No. South Carolina employees only need to submit an SC W-4 if:
Employees starting a new job must also submit a federal W-4.
If a new employee hired does not provide their employer with an SC W-4, the number of allowances claimed for South Carolina withholding purposes is 0.
Employers should submit a copy of the SC W-4 to the SCDOR in either of the following cases:
Mail W-4 copies to:
SCDOR
Tax Support
PO Box 125
Columbia, SC 29214-0400
Yes. Employees claiming that they are exempt from South Carolina Withholding must submit an SC W-4 every year. If the employer does not receive a new SC W-4 by February 15 each year, they should withhold taxes as if the employee is single and claiming 0 allowances.
If you issued a W-2 with SC wages or SC withholding, you must submit a copy to the SCDOR. You are only required to submit 1099s to the SCDOR if they have SC withholding on them.
Filing requirements:
File online with MyDORWAY:
Even if you are not required to file W-2 or 1099 forms online, it is preferred.
Paper filing:
If you submit fewer than 10 W-2 or 1099 forms, you can submit them by paper along with form WH-1612.
The SCDOR no longer accepts W-2 or 1099 forms submitted by CD-ROM.
To protect against identity theft, the IRS allows employers to truncate (partially mask using an asterisk or other symbol) employee SSNs, FEINs, or ITINs on the W-2 or 1099 forms that the employer provides to the employee.
The W-2 and 1099 that the employer provides to the SCDOR, IRS, and Social Security Administration must have the full SSN, FEIN, or ITIN.
Employers may not truncate their own identification number on any forms given to employees, the SCDOR, IRS, or Social Security Administration.
Incorrect information on the W-2 can cause problems for taxpayers trying to file their Individual Income Tax returns. You must provide your employees with corrected W-2 information. You should prepare a W-2c for each employee that received an incorrect W-2.
You should also prepare a letter on company letterhead stating the wrong information and the corrected information. Give a copy of this letter to each employee and instruct them to submit a copy of the letter with their W-2 when they file their Individual Income Tax return. You should also send a copy of this letter to SCDOR.
When filing your Individual Income Tax return, you must include a Substitute for Form W2 Wage and Tax Statement (SC4852).
