Effective for taxable years beginning after 1994 the General Assembly enacted legislation to allow an income tax credit for hiring employees terminated from employment as a result of the closing or realignment of a federal military installation. Effective for taxable years after 1995, the General Assembly has amended this legislation to allow an income tax credit for hiring employees terminated from employment as a result of an applicable federal facility reducing its employment by three thousand or more jobs after December 31, 1990. Also, the credit is ten percent times an increased qualified wage base of up to $10,000. To obtain the credit the status of "terminated employees" must be certified by the South Carolina Employment Security Commission. See definitions for required location of work activity and for explanation of the terms used in the credit.
Qualified wages for a qualified terminated employee for a taxable year may not exceed $10,000. Qualified wages for a qualified terminated employee are only those wages paid for services rendered during the one year beginning with the day the individual first works for an employer after becoming a certified terminated employee.
Definitions
- Applicable federal military installation means a federal military installation or other facility which is closed or realigned under:
- The Defense Base Closure and Realignment Act of 1990;
- Title II of the Defense Authorization Amendments and Base Closure and Realignment Act; or
- Section 2687 of Title 10, United States Code.
- Applicable federal facility means a federal facility that has reduced its permanent employment by three thousand or more jobs after December 31, 1990.
- Economic impact region means a county or municipality, any portion of which is located within twenty-five miles of the boundaries of an applicable federal military installation or applicable federal facility, and any area not otherwise included as part of the economic impact region if the Department of Commerce determines the area to be adversely impacted by the closing or realignment of an applicable federal military installation or applicable federal facility.
- "Qualified wages" means wages paid by an employer to an employee if:
- At least ninety percent of the employee's services for the employer during the taxable year are directly related to the conduct of the employer's trade or business within an applicable federal military installation or economic impact region; or
- At least fifty percent of the services of the employee for the employer during the taxable year are performed within the installation or region;
- "Qualified wages" include, with respect to an individual, only wages attributable to services rendered during the one year beginning with the day the individual first works for an employer after becoming a terminated employee.
- Qualified wages for a taxable year may not exceed ten thousand dollars.
- Qualified wages do not include wages paid for services performed as an employee of the federal government or an agency or instrumentality of the federal government.
- (a) "Terminated employee" means an individual who is certified by the South Carolina Employment Security Commission, under procedures similar to the procedures described in the Internal Revenue Code Section 51(d)(16), as being an individual, whether or not a federal employee:
- Who was employed in an economic impact region, and
- The close of the first year period beginning the date on which the employee first begins work for an employer after the job termination.
- For purposes of this credit, the term "employee" includes an employee described in Internal Revenue Code Section 401(c)(1), relating to self-employed individual.