Outdated Withholding tables lead to over-withholding, which amounted to $1.5 billion in 2015.
Over-withholding is all of the money that was taken out of taxpayers' wages that was not needed to pay their state income taxes. In other words, the government took more money than it should have and must return it to taxpayers through Individual Income Tax refunds. Over-withholding has created a number of issues for the State:
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Unreliable General Fund Budgeting: A big portion of the money collected throughout the year has to be refunded back to taxpayers. ($1.5 billion in 2015.)
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Unnecessary Administrative Costs: Generating, regulating, and protecting refunds is expensive.
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Undeniable Risk: Big tax refunds make South Carolina a target for income tax refund fraud and theft.
By addressing over-withholding, these problems begin to correct themselves over time, helping to create a healthier State. South Carolina Withholding tables were updated for the first time in 25 years in 2017. Tables are now updated annually.
