If you're a South Carolina small business owner and want to save money on your tax bill in 2021, the South Carolina Department of Revenue (SCDOR) wants you to know about tax credits that may be available to you.
All South Carolina tax credits related to small businesses are nonrefundable, meaning they cannot reduce your tax liability below zero. Each of the credits apply to specific circumstances. Review the facts in your situation to see if any of the credits detailed below apply:
- Small Business Jobs Credit: Qualifying business taxpayers with 99 or fewer employees worldwide who increase employment in South Carolina by at least two or more full-time jobs in a year can take a credit against South Carolina Individual Income Tax, Corporate Income Tax, Bank Tax, or Insurance Premium Tax. The credit is limited to 50% of the tax liability. The credit has a 15-year carryforward. Use form TC-4SB to claim the credit.
- Apprenticeship Credit: Taxpayers who employ an apprentice are eligible for an Income Tax credit of $1,000 per apprentice for up to four years. Each apprentice must be registered with the U.S. Department of Labor's Office of Apprenticeship of the Employment and Training Administration. There is no carryforward of the credit. Use form TC-45 to claim the credit.
- Credit for State Contractors Subcontracting with Socially and Economically Disadvantaged Small Business: Taxpayers who have a contract with the State of South Carolina and who subcontract with a socially and economically disadvantaged small business are eligible for an Income Tax credit equal to 4% of the payments to the subcontractor, not to exceed $50,000 per year. Taxpayers can only claim the credit for 10 years. Use form TC-2 to claim the credit.
- Accelerated Small Business Jobs Credit: This credit is similar to the Small Business Jobs Credit but is taken in the year the jobs are created. The credit is limited to 50% of the tax liability and has a 15-year carryforward. Use form TC-4SA to claim the credit.
Find more tips and filing information on the SCDOR's website at dor.sc.gov.