If you're a South Carolina small business owner and want to save money on your tax bill in 2023, the South Carolina Department of Revenue (SCDOR) wants you to know about tax credits that may be available for you to claim.

More than 445,000 small businesses operated in South Carolina in 2021, employing more than 830,000 people, according to the U.S. Small Business Administration. If you operate one of those small businesses and meet the qualifications, the following tax credits could lower your tax liability.

All South Carolina tax credits related to small businesses are nonrefundable, meaning they cannot reduce your tax liability below zero. Each of these credits applies to specific circumstances. Review the facts in your situation to see if any of the credits detailed below apply.

Here are some of the credits available for small business owners:

• 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, Bank Tax, or Insurance Premium Tax. The credit is limited to 50% of the tax liability. The credit has a 15-year carryforward.  Use the TC-4SB to claim the credit.
• Accelerated Small Business Jobs Credit: Similar to the Small Business Jobs Credit, this credit is taken in the year the jobs are created. The credit amounts per job created are based on county location and gross wages. The credit is limited to 50% of the tax liability and has a 15-year carryforward.  Use the TC-4SA to claim the credit.
• Apprenticeship Credit: Taxpayers who employ an apprentice registered with the U.S. Department of Labor are eligible for a Corporate or Individual Income Tax credit of $1,000 for up to four years per apprentice. Use the TC-45 to claim the credit.
• Formerly Incarcerated Apprenticeship Credit: Taxpayers who employ a formerly incarcerated individual as a new employee in an apprenticeship validated by the U.S. Department of Labor are eligible for a tax credit of $1,000-3,000, depending on the year of apprenticeship. The credit is available for employees hired from January 1, 2022 to December 31, 2026. The credit can be used for Corporate or Individual Income Tax, Bank Tax, Savings and Loan Tax, Corporate License Fee or Insurance Premium Tax. Use the TC-64 to claim the credit.
• Veterans Apprenticeship Credit: Taxpayers who hire a veteran of the U.S. Armed Services as a new employee in an apprenticeship validated by the U.S. Department of Labor are eligible for a tax credit of $1,000-3,000 depending on the year of apprenticeship. The credit is available for employees hired from January 1, 2022 to December 31, 2026. The credit can be used for Corporate or Individual Income Tax, Bank Tax, Savings and Loan Tax, Corporate License Fee or Insurance Premium Tax. Use the TC-65 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 a credit equal to 4% of the payments to the subcontractor. The credit can be used for Corporate or Individual Income Tax. It is limited to $50,000 per year and cannot exceed 10 years. Use the TC-2 to claim the credit.

This is just a snapshot of these credits. For more complete details about these credits, and all South Carolina tax credits, visit dor.sc.gov/taxcredits.

SCBOS can help small businesses with tax credits
South Carolina Business One Stop (SCBOS) is our state's one-stop resource to help small business owners get squared away with their tax and licensing obligations, including tax credits. For more information on any of the topics mentioned above, connect with SCBOS on Twitter and Facebook or visit scbos.sc.gov.

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