According to South Carolina Instructions for Form SC-1040, below are other subtractions allowed on your South Carolina return. When reporting these other subtractions, enter the amount applicable and a brief description.
SC ABLE Savings Account. You may deduct 100% of any contributions made to an ABLE savings account, subject to program limitations, between January 1, 2017 and December 31, 2017.
South Carolina 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. For 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 federal purposes and the deduction that would have been allowed without bonus depreciation. Therefore, the South Carolina adjusted basis is greater than the federal adjusted basis. For all other years of the depreciable life of the property, an additional depreciation deduction is available for South Carolina purposes.
South Carolina net operating loss. Amount of South Carolina net operating loss that is more then the federal amount. The same loss cannot be deducted more than once. (Keep your worksheet for your records.) No carryback losses allowed.
Legislators within a 50-mile radius of the State House are allowed to subtract travel expenses.
Retirement income paid by the U.S. government for service in the Reserves or National Guard is not taxed for South Carolina purposes. You can calculate the percentage that is excludable by dividing the length of time you served by the total length of your service. Multiply that percentage by your retirement income for the amount you can exclude.
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. If your legal residence is insured against hurricane, rising floodwaters, or other catastrophic windstorm event damage, you are allowed to contribute:
- $2,000 if the qualified deductible is $1,000 or less,
- twice the qualified deductible if it is between $1,000 and $7,500; or
- $15,000 if the qualified is more than $7,500.
If your legal residence is not insured against hurricane, rising floodwaters, or other catastrophic wind event damage, the limit is $250,000 or the value of your legal residence, whichever is less.
Depending upon how a particular item was reported or deducted, the following items may be an addition or subtraction:
- A change in accounting method to conform in the same manner and same amount as federal. At the end of the federal adjustment, any balance will continue until fully adjusted. This may be an addition or subtraction.
- The installment method of reporting is to be adjusted if the entire sale has been reported for state purposes or to continue on an installment basis if the entire sale has been reported for federal purposes. This may be an addition or subtraction.
- Adjust the federal gain or loss to reflect any difference in the South Carolina basis and federal basis. This maybe an addition or subtraction.
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To enter any of these Other Subtractions on your South Carolina return within your account, please follow the steps below:
- State Section
- Edit (blue pencil)
- Subtractions from Income
- Other Subtractions from Income