A resident estate belongs to a descendent who was domiciled in South Carolina at the time of his or her death.

A resident trust is administered in South Carolina.

A resident beneficiary is:

1. An individual domiciled in South Carolina;
2. A corporation or partnership whose principal place or business is in South Carolina; or
3. A resident estate or trust. Any estate, trust, or beneficiary other than a resident estate, trust, or beneficiary is a nonresident estate, trust, or beneficiary.

A South Carolina income tax return must be filed by:

1. Every estate or trust having a nonresident beneficiary;
2. Every estate or trust having gross income of $600 or more for the tax year;
3. Every trust having taxable income for the tax year; and
4. Every estate in bankruptcy under Chapter 7 or 11, Title 11, U.S. Code, of an individual having gross income of $2,700 or more for the tax year.

The fiduciary of the estate or trust is responsible for filing the income tax return of the estate or trust.

A taxpayer may request an extension of time for up to 5 ½ months to file a fiduciary tax return.  Use Form SC8736 to request an extension of time to file.  

Yes, quarterly estimated taxes are due at the same time that federal estimated taxes are due.

Yes, interest is due on any tax not paid by the original date the return is due until the time the payment is made. Underpaid taxes are subject to the following penalties:

1. If the tax paid in by the original due date is less than 90% of the amount due, a penalty of 0.5% of the unpaid amount is due for each month or part of a month, not to exceed 25%, that the tax remains unpaid.
2. If a taxpayer fails to file a return by the original or extended due date, a penalty of 5% of the unpaid amount is due for each month or part of a month, not to exceed 25%, that the tax remains unpaid.
3. A declaration penalty, equal to the federal interest rate on underpayments, applies to a failure to pay estimated taxes.

The South Carolina taxable income of a resident estate or trust begins with federal taxable income and is modified by differences between South Carolina and federal law. The income of an estate or trust doing business in more than one state is subject to the allocation and apportionment provisions in Article 17, Chapter 6, Title 12, S.C. Code of Laws.

An electing small business trust is taxed at 7%. Any other estate or trust pays the same rate that applies to individuals. An estate or trust may be eligible for the reduced income tax rate of 3% on active trade or business income from a pass through business.

Yes, a partnership, S-corporation, or Limited Liability Company (LLC) taxed as a partnership or S-corporation may file a composite return on behalf of two or more nonresident partners, shareholders of the S-corporation or members of the LLC, who are individuals, estates, or trusts.  

Yes, an estate or trust making a distribution to a nonresident beneficiary must withhold 7% of the South Carolina taxable income distributed and remit the withholding to the SCDOR. The fiduciary must remit the amount withheld to the SCDOR on or before the due dates for paying estimated taxes.

Are there exceptions to the requirement to withhold on behalf of nonresident beneficiaries?

The trust is exempt from tax under Internal Revenue Code § 501:

1. The nonresident beneficiary is exempt from tax under Internal Revenue Code § 501;OR
2. The nonresident beneficiary files an I-41 affidavit.

By filing an I-41​ affidavit, the nonresident beneficiary agrees to be subject to the jurisdiction of the SCDOR and the courts of South Carolina to determine the South Carolina tax liability, including estimated taxes, interest, and penalties. However, filing the affidavit is not an admission of tax liability.

South Carolina has no estate tax for decedents dying on or after January 1, 2005.