Withholding- FAQ

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WITHHOLDING

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Withholding

Batch Withholding Program

Phone: 1-844-898-8542
Email: WithholdingTax@dor.sc.gov

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Filing Withholding Returns

If I have no withholding during a quarter, am I required to file a quarterly return WH-1605?

Yes. If the withholding account is open, quarterly returns must be filed each quarter. If a return is not filed, you will receive a Failure to File notice. You may file the return either by mailing the return to SCDOR or by filing electronically using MyDORWAY.
NOTE: Please do not fax copies of your return to us for processing. The returns are scanned into our system and, due to the quality of faxed copies, they are often not scannable.

How do I file a Withholding return?

You can file a Withholding return (WH-1605 or WH-1606) online or by mailing a paper return.

Taxpayers who withhold $15,000 or more per quarter or who make 24 or more withholding payments in a year must file and pay electronically. File online using MyDORWAY >

File Online (preferred) with our free tax portal, MyDORWAY
Paper Filing: Complete the applicable form and mail it to the address on the form.

Does SCDOR accept batch filed returns?

If you file 10 or more South Carolina Withholding returns in a quarter, consider using our Batch Withholding Program to quickly and easily file online. In one file, you can report the information normally submitted on the SC Withholding Quarterly Tax Return (WH-1605) or SC Withholding Fourth Quarter/Annual Reconciliation Tax Return (WH-1606) for multiple clients.

If you are a tax preparer who files more than 100 returns per year and are required to file electronically, our Batch Withholding Program is a great option for you.

You must apply before you can use this option. Review our Batch Withholding Program Guide for more information on applying as a Batch Filer.

My business closed during the year. Do I still have to file the 4th Quarter Return/Annual Reconciliation?

Yes. If a withholding account is open during any portion of the year, a 4th Quarter/Annual reconciliation return (WH-1606) is required. (The return is required because it contains information relating to the entire year, not just the 4th quarter).

How do I close my Business Tax account?

If you need to close your Business Tax account, you have two options:

Log in to MyDORWAY, then select the More tab, and click Close a Tax Account to get started.
OR
Indicate your account closure on your final tax return by selecting Close Account, Business Permanently Closed, Final, or something similar.

Out-of-state Employees: For which state should I withhold?

I have an employee who lives in another state but works in South Carolina. Which state taxes do I withhold?

Wages are taxed in the state in which they are earned. If the employee is working in South Carolina, regardless of where he is a resident, the income earned in South Carolina is taxed by South Carolina.

I have an employee who lives in South Carolina but works in another state. Which state taxes do I withhold.

Wages are taxed in the state in which they are earned unless the employee is working in a state that does not withhold state income tax. If the employee is a South Carolina resident and is working in a state that does not have state income tax, you should withhold South Carolina tax. Florida, Texas, and Tennessee are examples of states that have no state income tax. If a South Carolina resident is working in one of these states, then South Carolina taxes would be withheld. (Section 12-8-520(C))

I have an employee who lives and works outside of South Carolina. Are my remote employee’s wages taxable in South Carolina?

Generally, the remote employee’s wages are not taxable since the employee is located outside of South Carolina. However, you may be required to withhold Income Taxes from the remote employee’s wages for the state they are physically located in.

I have an employee who is a military spouse working in South Carolina. Their state of residency is in another state. Which state do I withhold and remit the taxes to?

A military spouse can retain a tax domicile in a state other than the state of residency as long as the following conditions are satisfied:

1) The state where the service member and spouse are living is not the domicile of the spouse or the service member;
2) The spouse resides in the state solely in order to live with the service member;
3) The service member is present in the state as a result of military orders; and
4) The spouse and the service member both have the same domicile.

See SC Revenue Ruling #10-5 for more information.

Getting a Withholding Number

How do I obtain a South Carolina Withholding File Number?

You can apply for a SC Withholding File Number using either of two (2) ways:

1) Register on MyDORWAY. You will be given a confirmation number after completing questions and the registration process. The SC reference number is your Withholding File Number. *Note: It may take up to 24 hours to receive the reference number. You will receive a Withholding packet in approximately two weeks.

2) You may download a copy of the SCDOR-111 (Tax Registration Application) from our website. Complete the form and mail it to the address provided. In approximately three weeks you will receive a letter informing you of the SC Withholding File Number that has been assigned to you along with a packet of withholding information.
Your SC Withholding File Number is a 9-digit number.

Reference this number on all returns, correspondence and any phone calls made to the Department.

Do you have to get a new Withholding File Number if the business has a change of ownership?

Yes, should the ownership of the business change, such as conversion from a partnership to a corporation, a new Withholding File Number must be obtained. If you are required to get a new federal identification number (FEIN), you are also required to get a new SC Withholding File Number.

I received a notice-what does it mean?

I received a notice for failure to file a quarterly reconciliation, but I did not have any employees and/or had zero withholding for the period mentioned. Why did I receive this notice?

If the withholding account is open, a quarterly return needs to be filed. If a quarterly return is not filed, a failure to file notice will be mailed. If you are not going to have employees in the near future, the account should be closed as of your last payroll date.

I have never had any employees. Why am I getting notices saying that I failed to file returns?

If you have an open withholding account, you are required to file a return, even if you had no withholding for the quarter.

If a withholding application was submitted in error, then it is recommended that the withholding account be closed. The account must be closed on MyDORWAY.

I have received a Proposed Assessment (C-332) or an Assessment (C-133) stating that I owe taxes for a past period. May I pay the taxes with MyDORWAY or by EFT?

You may pay the amount owed online through MyDORWAY. You may also write a check, attach it to a copy of the notice and mail it to the SCDOR at the address on the notice. You may not pay any past due notices by EFT.

I have received a Notice of Assessment for Failure to File a return for Withholding taxes, but I sent in the return on time. Why did I receive this notice and what do I do?

Review your copy of the return and verify that it is for the same quarter as the Notice. You can file your return and make payments using MyDORWAY. If a payment is due, send the payment along with a copy of the return to SCDOR, or file the return and payment amount due using MyDORWAY. Filing the return electronically or by paper will satisfy the notice.

I have received a Notice of Assessment for Failure to File a return for Withholding taxes. Do I owe this amount? I thought that I paid the taxes for this quarter.

You may not owe this amount. First, verify for which quarter the Notice was sent. Also check your records to verify that you made all payments for the quarter. The Notice was sent for Failure to File a withholding return. It does not mean that SCDOR did not receive your payments. It just means that SCDOR did not receive your return. You may electronically file using MyDORWAY or mail a paper return to the address on the form. Once the return is received (by either method), the notice will be satisfied.

Making a Withholding Payment

What are my options for making a Withholding Payment?

Electronic Payment Options:
1. MyDORWAY: File, pay and manage your withholding accounts online in this brand new tax portal.

2. Electronic Funds Transfer (EFT): Taxpayers must complete and submit the Registration Application For Electronic Funds Transfer D-128 before tax payments can be made via EFT using GovOne.

Paper Payment:
Mail payment with Form WH-1601 *If you have a balance due when you are filing your quarterly Withholding tax return (WH-1605 or WH-1606), you can mail a payment with the return and no WH-1601 will need to be submitted.

Other Agencies

I have been told that there is a law that I report all new hires. To whom do I report this?

New hires are reported at www.newhire.sc.gov or by calling 1-803-898-9235

What is the number of the Internal Revenue Service?

For Federal assistance, the IRS has a Business & Specialty Tax Line at 1-800-829-4933.

Overpayments/Refunds

If I overpaid in a quarter, how do I request a refund?

If you are claiming a refund from a quarter in the current calendar year, you file an amended return claiming the refund on line 3. An amended return is the same as the original return but has an X in the Amended indicator box.

If you are claiming a refund from a quarter in a previous calendar year, the employer will only receive a refund if the overpayment did not result in corrected W2s being issued to the employees. If the overpayment resulted in corrected W2s being issued, the overpayment can only be claimed by the employees on their South Carolina individual income tax return.

Unemployment Insurance

I have a question about Unemployment Insurance, SUI or form UCE?

Unemployment questions should be directed to the SC Department of Employment and Workforce (DEW) at 1-803-737-2400.

Questions concerning Contingency Assessments should also be directed to DEW.

W-4 Information

Why does South Carolina have its own W-4?

The 2020 federal W-4 removed allowances. South Carolina created its own W-4 to include allowances and match our withholding tables.

Are all South Carolina employees required to submit an SC W-4?

No. South Carolina employees only need to submit an SC W-4 if:

They start a new job
They want to make changes to their current South Carolina Withholding
They meet the requirements and want to claim exempt from South Carolina Withholding

Has South Carolina ever had its own W-4?

Before 2020, the SC W-4 was a specialized form for nonresident military spouses claiming a South Carolina withholding exemption. This exemption will be included as a checkbox on the new SC W-4.

What forms should employees hired after 2019 complete?

New employees hired after 2019 need to complete an SC W-4 and the federal W-4.

What happens if an employee hired after 2019 does not submit an SC W-4?

If an employee hired after 2019 does not provide their employer with an SC W-4, the number of allowances claimed for South Carolina withholding purposes is 0.

Do employers have to submit a copy of the SC W-4 to the SCDOR?

Employers should submit a copy of the SC W-4 to the SCDOR if:

The employee has ten or more allowances, or
They believe that any part of the employee’s SC W-4 is fraudulent

Mail W-4 copies to:
SCDOR
Tax Support
PO Box 125

Columbia, SC 29214-0400

Do employees claiming exempt from South Carolina Withholding need to complete an SC W-4 every year?

Yes. Employees claiming exempt from South Carolina Withholding need to submit an SC W-4 every year. If the employer does not receive a new SC W-4 by February 15 each year, they should withhold taxes as if the employee is single and claiming 0 allowances.

W-2s and 1099s

Are we required to submit W-2s or 1099s to the SCDOR?

If you issued a W-2 with SC wages and/or SC withholding, you must submit a copy (by paper or online) to the SCDOR. We only require you to submit 1099s to the SCDOR that have SC withholding on them.

Are we required to file electronically with SCDOR?

If you are required to file W-2s online with the Social Security Administration, then you are required to file W-2s online with the SCDOR. (1099s can only be submitted by paper or CD). Even if you are not required to file W-2s online, it is the preferred method.

How do I submit my W-2s or 1099s?

Filing W-2s online is the preferred method and mandatory if you are required to electronically file with the Social Security Administration.

You can file W-2s online using the W-2 portal on MyDORWAY. You are not required to submit Form WH-1612 to the SCDOR if you file online using the W-2 portal.

1099s and other informational forms must be filed by CD-ROM or paper and must be submitted with Form WH-1612. (You must use this method when filing if required to file W2cs, W2Gs or 1099s electronically for federal paper forms (only when filing fewer than 250 W2s, W2cs, W2Gs or 1099s) and must be submitted with form WH-1612.

Should I partially mask the SSN on W-2s for my employees?

To protect against identity theft, the IRS allows employers to truncate, or partially mask using an asterisk or other symbol, employee SSNs, FEINs, or ITINs on the W-2 or 1099 that the employer provides to the employee. The W-2 and 1099 that the employer provides to the SCDOR, IRS, and/or Social Security Administration must have the full SSN, FEIN, or ITIN.

Employers may not truncate their own identification number on any forms given to employees, the SCDOR, IRS, or Social Security Administration.

When preparing the W-2s, incorrect information was used. What should I do?

Incorrect information on the W-2 can cause problems for taxpayers trying to file their individual income tax returns. You must provide your employees with corrected W-2 information. You should prepare W-2Cs for each employee. In addition, you should prepare a letter on company letterhead stating the wrong information and the corrected information. A copy of this letter must be given to each employee with instructions that they must furnish a copy of the letter with their W-2 when they file their individual income tax return. You should also send a copy of this letter to SCDOR.

​Filing With​holding Returns​​​

If I have no withholding during a quarter, am I required to file a quarterly return WH-1605?​

​​Out-of-state Employees: For which state should I withhold?​​

I have an employee who lives in another state but works in South Carolina. Which state taxes do I withhold? ​

​Getting a Withholding Number​

​I received a notice-what does it mean?​

I received a notice for failure to file a quarterly reconciliation, but I did not have any employees and/or had zero withholding for the period mentioned. Why did I receive this notice? ​

​Making a Withholding Payment​

​Other Agencies​

I have been told that there is a law that I report all new hires. To whom do I report this?​

​Overpayments/Refunds​

​Unemployment Insurance​

​W-4 Information​

​W-2s and 1​099s​

Are we required to submit W-2s or 1099s to the SCDOR?​

My employer will not furnish me with ​a copy of my W-2. How do I file my individual income tax return?​