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What is Exceptional SC?

Exceptional SC (a 501(c)(3)), also known as the Educational Credit for Exceptional Needs Children fund or ECENC, was created by the South Carolina Legislature in 2016. The fund is made of tax-deductible donations that serve as scholarships for exceptional needs students in South Carolina to attend an approved independent school that best serves their needs. Applications and eligibility information are available at ExceptionalSC.org. The Exceptional SC board reviews applications and awards scholarships based on a number of criteria. Students who are awarded the scholarship must attend a school that the Education Oversight Committee has approved for program participation.




Parental Refundable Credit Update

Since the ECENC program became part of permanent law in 2018, the SCDOR has transitioned the Parental Refundable Credit reporting and administration process from a fiscal year to a calendar year. Here’s what parents and legal guardians need to know about the 2020 Parental Refundable Credit application process:

  • Exceptional SC grant awards received in 2020 will reduce the 2020 Parental Refundable Credit.
  • An updated TC-57A application will be available this fall on our website at dor.sc.gov/exceptional-sc and will require the following information for completion:
    • Student name 
    • Household information (for reporting purposes only as required by statute) 
    • School name 
    • Tuition charged for 2020 spring semester and 2020 fall semester 
    • Exceptional SC scholarship amounts (if applicable) for 2020 spring semester and 2020 fall semester 
    • Total tuition amount paid by applicant to qualifying school in 2020
  • 2020 spring grants will not affect 2019 approved credit amounts or your 2019 South Carolina Individual Income Tax return. 

If you have questions, contact us at TaxTech@dor.sc.gov.


FAQs

Why are 2020 spring semester scholarships not included with 2019 Parental Refundable Credit calculations?
The SCDOR has worked to transition from a fiscal year to a calendar year process since the ECENC program moved from proviso to permanent law in 2018.

Does this change impact my 2019 Parental Refundable Credit amount?
No; only Exceptional SC grant awards received during 2019 were included in approving 2019 Parental Refundable Credit applications. 2020 scholarships from Exceptional SC will be included in 2020 credit application approvals.



The information below is for Tax Year 2020.

Parental Refundable Tax Credits for Tuition Payments:

The SCDOR will begin accepting parental tax credit applications for 2020 later this fall. 

Parents or guardians of exceptional needs students can pay the student’s tuition at an eligible school, then apply for a tax credit toward their South Carolina income tax bill as outlined below:

  1. Parents or guardians make their payment to an eligible school for their qualifying student's tuition.
  2. Parents complete and submit Form TC-57A to request the parental refundable credit. The tax credit application cannot exceed the amount paid out of pocket for the student's tuition. The maximum amount of refundable credit that may be requested for each qualifying student is $11,000 or the cost of tuition, whichever is less, minus the amount of scholarship the qualifying student receives from Exceptional SC. Exceptional SC scholarships are not considered an out of pocket payment and cannot be claimed for this credit. Please save documentation and credit approval letter from the SCDOR with your tax records, including the exceptional needs child's proof of eligibility.
  3. The SCDOR will tentatively approve the parental refundable credit requests on a first come, first-served basis according to the applicants’ representations as long as the $2 million cap has not been met.
  4. When you file your South Carolina income taxes, the tentatively approved parental refundable credit is claimed by completing the I-361 form.

§12-6-3790 provides that South Carolina parental refundable tax credits may not exceed $2 million for 2020. 

Nonrefundable Tax Credits for Exceptional SC Donations:

Exceptional SC is now accepting tax year 2020 donations. For donation information, please contact Exceptional SC.

2020 donor credit information as of 5/31/2020:
Credits approved: $639,666.94

Anyone can donate to the Exceptional SC 501(c)(3) scholarship fund, which provides scholarships to exceptional needs students. Individuals and corporations who pay South Carolina taxes can make a donation to Exceptional SC and claim a dollar for dollar tax credit against their overall South Carolina income tax liability (personal corporate income tax). 

A taxpayer may not claim more than sixty percent of his total South Carolina tax liability for the year the contribution was made.  If a taxpayer deducts the amount of the contribution on his federal return and claims the nonrefundable credit, then he must add back the amount of the deduction for South Carolina income tax purposes.

Donors are:

  • Eligible to claim a dollar for dollar credit on state income tax liability;
  • Not allowed to designate a specific student or school as beneficiary;
  • Limited by a first come, first served annual statewide cap of $12 million.

Please visit ExceptionalSC.org/donate for more information and to make a donation. §12-6-3790 provides that South Carolina tax credits for donations to Exceptional SC may not exceed $12 million for 2020. 

For more information:

2016-2017 Fiscal Year Recap:

  • The $10 million cap for nonrefundable tax credits for donations to Exceptional SC in Fiscal Year 2017, provided in Proviso 109.15, was met in April 2017.
  • The $2 million cap for parental refundable tax credits in Fiscal Year 2017, provided in Proviso 109.15, was met in September 2016.

2017-2018 Fiscal Year Recap:

  • The $11 million cap for nonrefundable tax credits for donations to Exceptional SC in Fiscal Year 2018, provided in Proviso 109.11, was met on December 29, 2017.
  • The $2 million cap for parental refundable tax credits in Fiscal Year 2018, provided in Proviso 109.11was met on July 5, 2017.

2018 Tax Year Recap:

  • The $12 million cap for nonrefundable tax credits for donations to Exceptional SC in Fiscal Year 2019, provided in §12-6-3790, was met on July 6, 2018.
  • The $2 million cap for parental refundable tax credits in Fiscal Year 2019, provided in §12-6-3790, was met on October 1, 2018.

2019 Tax Year Recap:

  • As of December 31, 2019, $4,547,101.10 in nonrefundable tax credits were approved for donations to Exceptional SC, provided in §12-6-3790. 
  • The $2 million cap for parental refundable credits, provided in §12-6-3790, was met on October 1, 2019.