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South Carolina Subtractions

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South Carolina Subtractions


Although there are many subtractions to federal income for South Carolina purposes, many are already calculated by our program. Please enter any of the following subtractions that are applicable:

STATE TAX REFUND- If your state tax refund was included on  your federal Form 1040, that amount should be entered on this line.

TOTAL AND PERMANENT DISABILITY RETIREMENT INCOME TAXED ON YOUR FEDERAL RETURN- If disability retirement income was taxed on your federal income tax return and you are totally and permanently disabled, you may be able to deduct this income from your South Carolina taxable income. You must be totally and permanently disabled, unable to be gainfully employed in any capacity, receiving income from a disability retirement plan, and eligible for the homestead exemption under Section 12-37-250 to qualify. You do not qualify if you are receiving disability income from one job while able to perform another job. You must attach a copy of the physician's statement establishing that you are permanently and totally disabled.

OUT-OF-STATE RENTAL/BUSINESS OR REAL ESTATE INCOME NOT TAXABLE TO SOUTH CAROLINA-If you have income from out-of-state rental property; a business located outside South Carolina; or gain from real property located out of state, as reported on your federal return, enter this amount on this line. However, personal service income (W-2 or business wages) is taxable to South Carolina no matter where it is earned.

NET CAPITAL GAIN DEDUCTION-Net capital gains which have been held for a period of more than one year and have been included in the SC taxable income are reduced by 44% for SC income tax purposes.

VOLUNTEER DEDUCTION- Volunteer firefighters, rescue squad workers, volunteer hazardous material HAZMAT team members, reserve police officers, Department of Natural Resource (DNR) deputy enforcement officers, and members of the State Guard are allowed to deduct $3,000. Volunteer firefighters, rescue squad workers and HAZMAT members qualify only if their employer provides them with a form stating that they have earned the minimum number of points established by the State Fire Marshal during the year. Reserve police officers, DNR deputy enforcement officer, and the State Guard members qualify only if the appropriate authority provides them with an I-332 certification form certifying their eligibility for this deduction. An individual is limited to one deduction of $3,000. If a taxpayer and spouse both qualify, enter $6,000.

CONTRIBUTIONS TO THE SC COLLEGE INVESTMENT PROGRAM ("FUTURE SCHOLAR") OR TO THE SC TUITION PREPAYMENT PROGRAM- You may deduct 100% of any contributions to the SC College Investment Program ("Future Scholar") made between January 1, 2018 and through April 15, 2019.


INTEREST FROM U.S OBLIGATIONS- If you included your interst income from U.S obligations (such as U.S savings bonds, treasury notes and bils, etc.) as income on your federal income tax return, enter the amount on this line.  Deduct he interest income from South Carolina and/or federal obligations.


SOCIAL SECURITY AND/OR RAILROAD RETIREMENT AMOUNT IF TAXED BY FEDERAL- If you are taxed on any Social Security under Title 2 of the Social Security Act or ailroad retirement income on your federal return, enter the amount that was taxed on your federal return

RETIREMENT DEDUCTION- An individual who is under age 65 may claim a retirement deduction up to $3,000 of qualifed retirement income from his or her own plan.  An individual who is age 65 or older during the tax year may claim a retirement deduction up to $10,000 of qualifed retirement income from his or her own plan.

MILITARY RETIREMENT DEDUCTION-An individual taxpayer who has military retirement income, may deduct from SC taxable income, an amount of his SC earned income equal to the amount of military retirement income that is included in SC taxable income.

AGE 65 AND OLDER DEDUCTION- Beginning in the tax year in which a resident reaches age 65, he or she is entitled to a deduction of $15,000 against any South Carolina income.


SUBSISTENCE ALLOWANCE- Police and all commissioned law enforcement officers paid by South Carolina municipal, county, state governments or the federal government, full-time firefighters, and full-time emergency medical service personnel are entitled to subsistence allowances of $8.00 per regular workday. Your employer should provide you with the number of work days.

DEPENDENTS UNDER SIX YEARS OF AGE- An additional deduction is allowed for each dependent claimed on the federal income tax return who had not reached the age of six by December 31 of the tax year. Birthdate(s) and social security number(s) are required.

CONSUMER PROTECTION SERVICES-An individual may deduct the costs incurred by him or her in the tax year to purchase a monthly or annual contract or subscription for identity theft protection and identity theft resolution services.  The deduction is only for individuals who filed a return with the SC Department of Revenue for a tax year between 1998 and 2012 or when another’s personal identifiable information was included on the return. The deduction may not be claimed for an individual who either deducted the same actual costs as a business expense or is enrolled in the identity theft protection and  resolution services offered free of charge by the State. The deduction is limited to $300 for an individual taxpayer, and to $1,000 on a joint return or a return claiming dependents.

Other subtractions from income:

SC ABLE Savings Account-you may deduct 100% of any contributions made to an ABLE savings account subject to program limitations, between 1/1/18 and 12/31/18.

SC does not recognize bonus depreciation in IRC Section 168(k).  With or without bonus depreciation, the depreciable life of the property is the same for federal and state purposes.  Fo the tax year in which the property is placed in service, a taxpayer must add back the difference, in the line for other additions, between the depreciation deduction allowed for federalpurposes and the deduction that would have been allowed without bonus depreciation.  Therefore, the SC adjusted basis is greater that the federal adjusted basis.  For all other years of the depreciable life of the property, an additional depreciation deduction is available for SC purposes.

SC ne operation liss that is larger than the federal amount is a subtraction.  In no event is the same loss to be deducted more than once.  Attach your own worksheet or keep with your tax records.  No carryback losses are allowed.

Legislators within a 50 mile radius of the State House are allowed to subtract travel expenses.

Retirement income paid by the US government for service in the Reserves or National Guard is not taxed for SC purposes. (You may deduct the entire amount of the stipend paid by the state of SC for National Guard Services).

Determine the percentage of your military retirement income which is excludable by dividing the length of time you served in the Reserves and/or National Guard (not full time) by the length of time of your total military service.

If you have adopted a "special needs child", you may subtract $2,000 per year per child as long as the adopted child qualifies as a dependent on your federal return.

Include amounts contributed to a Catastrophe Savings Account and interest income earned by the account.









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Views: 611 Created on: Jun 15, 2013
Date updated: Jan 03, 2019

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