South Carolina offers 58
Individual Income Tax credits, each with its own eligibility requirements, amounts that can be claimed, and other characteristics. Those credits vary by popularity, but some of the often overlooked credits may lower the tax liability for eligible taxpayers.
As you start to plan for next year's tax season, the South Carolina Department of Revenue (SCDOR) wants you to know about some of the lesser-used and lesser-known nonrefundable credits that you may be eligible to claim. If you're eligible, you may be able to lower your tax liability thanks to these credits:
Residential Retrofit Credit – Individual taxpayers who retrofit their legal residence to be more resistant to hurricanes, floods, or catastrophic wind damage can claim this credit, which is equal to the lesser of 25% of costs or $1,000. They can also claim an additional credit of up to $1,500 for Sales & Use Tax paid on purchases of qualifying tangible personal property. For Fiscal Year 2022, 499 returns claimed this credit for a total of $661,767. Use the TC-43 to claim the credit.
Excess Insurance Premium Credit – For homeowners who may feel they are paying very high insurance premiums, this credit may help. Those who pay residential property and casualty insurance premiums in excess of 5% of their adjusted gross income can claim this credit, which cannot exceed $1,250 and has a carryforward of five years. For FY2022, 2,152 returns claimed the credit for a total of $2,546,378. Use the
TC-44 to claim the credit.
Nursing Home Credit – Individuals who pay for nursing facility level of care for themselves or another individual to either an institution providing nursing facility level of care or a provider of in-home or community care can claim this credit, which must be certified by a licensed physician. The credit is limited to 20% of expenses, up to $300. For FY2022, 165 returns claimed it for a total of $78,173. Use the
SC1040TC to claim the credit.
Preceptor Income Tax Credit – Eligible physicians, advanced practice registered nurses, and physician's assistants who serve as a preceptor for at least two qualifying clinical rotations can claim this credit for tax years 2020 through 2025. Preceptors are experienced licensed clinicians who serve as teachers and coaches during students' clinical rotations. The credit amounts depend on the type of preceptor, the percentage of practice that is Medicaid-insured, Medicare-insured, or self-pay patients, and the tax year. The credit is phased in over five years and is calculated per rotation for up to four rotations, though those serving more than four rotations can earn a deduction for up to six more rotations. The credit cannot exceed 50% of your tax liability after other credits are applied and has a 10-year carryforward. For FY2022, 127 returns claimed this credit for a total of $88,772. Use the correct year's
TC-62 to claim the credit.
Apprenticeship Credits – South Carolina offers three types of apprenticeship credits, including two new credits available for the first time in tax year 2023.
Apprenticeship Credit – To qualify, a taxpayer must employ an apprentice under an apprentice agreement registered with the U.S. Department of Labor. The apprentice must be employed for at least seven months of the year. The credit equals $1,000 per apprentice, which can be claimed for up to four years per apprentice. Use the
TC-45 to claim the credit. For FY2022, 41 returns claimed this credit for a total of $186,555.
Formerly Incarcerated Apprenticeship Credit – This new credit is for taxpayers who hire a formerly incarcerated individual as a new employee in a registered apprenticeship validated by the U.S. Department of Labor. The apprentice must be hired between January 1, 2022 and December 31, 2026 and within three years of incarceration in a state or county prison, jail, or detention center. The credit ranges from $3,000 in year one to $1,000 for year three and is available for a variety of taxes. Use the
TC-64 to claim the credit. See
RR23-2 for more information.
Veterans Apprenticeship Credit – Another new credit, this is for taxpayers who hire a veteran of the U.S. Armed Forces as a new employee in a registered apprenticeship validated by the U.S. Department of Labor. The apprentice must be hired between June 22, 2022 and December 31, 2026. The credit amounts and tax uses are identical to those for the Formerly Incarcerated Apprenticeship Credit. The apprentice must have been honorably discharged or released due to a service-connected disability. Use the
TC-65 to claim this credit. See
RR23-1 for more information.
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