What Credits Are Available on a South Carolina Return?

South Carolina offers a variety of tax credits that may reduce the amount of tax you owe. Some credits are calculated automatically from information already entered on your return, while others require additional forms, schedules, certifications, or supporting documentation.

Many business and special-purpose credits are claimed on Schedule SC1040TC, Tax Credits.

Credits Automatically Calculated on Your Return

Child and Dependent Care Credit

South Carolina provides a credit for taxpayers who qualify for the federal Child and Dependent Care Credit.

The credit helps offset expenses paid for the care of a qualifying child or dependent so that you can work or look for work.

Two Wage Earner Credit

The Two Wage Earner Credit is available to certain married taxpayers filing a joint South Carolina return when both spouses have earned income.

The credit is designed to provide relief when both spouses contribute earned income to the household.

Credits Entered Separately

Tuition Tax Credit

South Carolina allows a credit for qualifying tuition paid to eligible institutions of higher education.

Eligible expenses generally include:

• Tuition
• Required enrollment fees

Expenses such as room, board, transportation, and personal expenses generally do not qualify.

Credit for Other State Taxes

If you're a South Carolina resident and paid income tax to another state on income that is also taxed by South Carolina, you may qualify for this credit.

The credit helps reduce double taxation on the same income. For more information, please see our KB article here. 

Classroom Teacher Expenses Credit

Eligible classroom teachers may claim a credit for certain unreimbursed classroom expenses.

Qualifying expenses may include:

• Instructional materials
• Classroom supplies
• Educational resources
• Books and teaching aids

Parental Refundable Credit

Required Form: Form I-361

The Parental Refundable Credit provides a refundable credit for eligible taxpayers who meet South Carolina's requirements.

Because this is a refundable credit, it may increase your refund even if the credit exceeds the amount of tax you owe.

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Schedule SC1040TC is used to claim many of South Carolina's business, investment, energy, rehabilitation, education, and economic development credits.

Carryover of Unused Qualified Credits

If you were unable to use all of a South Carolina credit in a prior year, you may be able to carry the unused portion forward and claim it in the current year.

Documentation supporting the original credit and carryforward amount should be retained.

New Jobs Credit

Provides a credit to qualifying businesses that create and maintain eligible jobs in South Carolina.

The credit amount generally depends on:

• Number of new jobs created
• Location of the business
• Employee qualifications

Qualified Conservation Contribution Credit

Available for qualifying donations of conservation easements that preserve:

• Agricultural land
• Forest land
• Scenic land
• Historic property

Appraisals and conservation documentation are generally required.

Alternative Motor Vehicle Credit

Required Form: Schedule TC-35

Available for qualifying alternative fuel or clean transportation vehicles meeting state requirements.

Solar Energy Credit

Required Form: Schedule TC-38

Available to taxpayers who install qualifying solar energy systems in South Carolina.

The credit generally applies to approved solar energy property placed into service during the tax year.

Residential Retrofit Credit

Required Form: Schedule TC-43

Provides a credit for qualified home modifications made to improve accessibility for individuals with disabilities.

Examples may include:

• Wheelchair ramps
• Wider doorways
• Accessible bathrooms
• Lift systems

Excess Insurance Premium Credit

Required Form: Schedule TC-44

Allows qualifying taxpayers to claim a credit related to excess insurance premium taxes paid under South Carolina law.

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Other Schedule SC1040TC Credits

Additional credits can be entered through the Other Credits section of Schedule SC1040TC.

Code 001 – Drip/Trickle Irrigation Systems Credit

Available to taxpayers who install qualifying drip or trickle irrigation systems designed to conserve water in agricultural operations.

Code 002 – Minority Business Credit

Available for qualifying investments in certified minority-owned businesses operating in South Carolina.

Code 003 – Water Resources Credit

Available for approved projects that conserve, improve, or protect water resources.

Code 005 – Scenic Rivers Credit

Available for qualifying conservation efforts involving designated South Carolina scenic rivers.

Code 007 – Palmetto Seed Capital Credit

Encourages investment in startup and emerging South Carolina businesses.

Code 009 – Child Care Program Credit

Available to businesses that establish, operate, or support qualifying childcare facilities or childcare programs.

Code 011 – Capital Investment Credit

Available for qualifying business investment projects that promote economic growth in South Carolina.

Code 012 – Family Independence Payments Credit

Provides a credit for qualifying family independence assistance payments made under South Carolina law.

Code 014 – Community Development Credit

Available for investments in approved community development projects serving low-income communities.

Code 018 – Research Expenses Credit

Provides a credit for qualifying research activities conducted in South Carolina.

Code 020 – Brownfields Cleanup Credit

Available for approved environmental cleanup and rehabilitation projects involving contaminated properties.

Code 021 – Certified Historic Structure Credit

Provides a credit for qualifying rehabilitation expenses incurred on certified historic commercial structures.

Code 022 – Certified Historic Residential Structure Credit

Available for qualifying rehabilitation expenses incurred on certified historic residential property.

Code 023 – Textiles Rehabilitation Credit

Available for redevelopment and rehabilitation of abandoned textile mill properties.

Code 024 – Commercials Credit

Provides a credit for qualifying commercial advertising productions completed in South Carolina.

Code 025 – Motion Picture Credits After June 30, 2004

Available for qualifying film and television production activities conducted in South Carolina.

Code 026 – Venture Capital Investment Credit

Provides a credit for qualified investments in South Carolina businesses through approved venture capital programs.

Code 027 – Health Insurance Pool Credit

Available for qualifying contributions to approved South Carolina health insurance pools.

Code 028 – South Carolina Quality Forum Credit

Provides a credit for contributions supporting quality improvement initiatives through the South Carolina Quality Forum.

Code 029 – Qualified Retirement Plan Contribution Credit

Available for qualifying contributions made to eligible retirement plans established by employers.

Code 030 – Port Cargo Credit

Available to businesses that increase cargo volume moved through South Carolina ports.

Code 031 – Retail Facilities Revitalization Credit

Provides a credit for qualifying redevelopment projects involving abandoned retail facilities.

Code 032 – Premarital Preparation Course Credit

Available to taxpayers who complete a qualifying premarital preparation course and meet South Carolina's requirements.

Code 036 – Industry Partnership Fund Credit

Available for qualifying contributions to approved industry partnership funds supporting workforce development.

Code 040 – Ethanol or Biodiesel Production Credit

Available for qualifying ethanol or biodiesel fuel production activities within South Carolina.

Code 041 – Renewable Fuel Facility Credit

Provides a credit for investment in qualifying renewable fuel production facilities.

Code 045 – Apprenticeship Credit

Available to employers participating in approved apprenticeship programs and hiring qualifying apprentices.

Code 046 – Credit for Shareholders of S Corporations

Allows shareholders to claim credits passed through from qualifying South Carolina S corporations.

Supporting documentation from the corporation should be retained.

Code 051 – Venison for Charity Credit

Available to taxpayers who donate processed venison to approved charitable organizations.

Code 052 – Fire Sprinkler System Credit

Provides a credit for the installation of qualifying fire sprinkler systems in eligible buildings.

Code 053 – Energy Efficient Manufactured Home Credit

Available for qualifying energy-efficient manufactured homes meeting state standards.

Code 054 – Clean Energy Credit

Provides a credit for qualifying clean energy investments and projects.

Code 055 – Abandoned Buildings Revitalization Credit

Available for rehabilitation and redevelopment of qualifying abandoned buildings.

Code 056 – Angel Investor Credit

Available to taxpayers who make qualifying investments in approved startup or emerging businesses.

Code 057 – Exceptional Needs Children's Scholarship Credit

Available for qualifying contributions made to approved scholarship funding organizations.

Code 058 – Solar Energy Property Credit

Provides a credit for qualifying solar energy property installed and placed in service in South Carolina.

Code 059 – Alternative Fuel Property Credit

Available for qualifying alternative fuel storage, distribution, and dispensing property.

Code 061 – Agribusiness Income Tax Credit

Provides credits designed to encourage agricultural production, processing, and agribusiness investment.

Code 062 – Preceptor Income Tax Credit

Available to qualifying physicians, advanced practice registered nurses, and physician assistants who serve as approved preceptors for educational programs.

Code 063 – South Carolina Housing Tax Credit

Available for qualifying affordable housing projects and investments designed to increase the availability of affordable housing within South Carolina.

Code 102 – Nursing Home Credit

Available to qualifying taxpayers who maintain a qualifying family member in a licensed nursing home and meet state eligibility requirements.

Code 104 – Small Business Jobs Credit

Available to eligible small businesses that create and maintain qualifying jobs in South Carolina.

Code 204 – Accelerated Small Business Jobs Credit

Provides enhanced job creation incentives for qualifying small businesses operating in designated areas of South Carolina.

Code 304 – New Jobs Credit for Professional Sports Teams

Available to qualifying professional sports organizations that create eligible jobs within South Carolina.

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Pass-Through Entity Credits

Many South Carolina credits may be passed through from:

• Partnerships
• S Corporations
• Limited Liability Companies (LLCs)
• Trusts
• Estates

If you're claiming a pass-through credit, retain copies of:

• South Carolina Schedule K-1
• Credit certificates
• Supporting schedules
• Entity statements

Examples include:

• New Jobs Credit
• Research Expenses Credit
• Historic Rehabilitation Credits
• Agribusiness Credits
• Angel Investor Credit
• Community Development Credit
• Other Schedule SC1040TC credits

Program Entry

To claim credits reported on Schedule SC1040TC:

1. Navigate to the South Carolina Return section.
2. Select Tax Credits - Schedule SC1040TC.
3. Enter any carryover credits and eligible credit amounts.
4. Complete any supporting schedules, such as:
   • Schedule TC-35
   • Schedule TC-38
   • Schedule TC-43
   • Schedule TC-44
   • Form I-361
5. Select the appropriate credit code when entering credits in the Other Credits section.
6. Continue through the remainder of the South Carolina return.

What Records Should I Keep?

Keep copies of:

• Schedule SC1040TC
• Schedule K-1 forms
• Credit certificates
• Form I-361
• Schedule TC-35
• Schedule TC-38
• Schedule TC-43
• Schedule TC-44
• Tuition records
• Conservation easement documentation
• Solar installation records
• Vehicle purchase records
• Business records supporting job creation credits
• Any schedules or worksheets used to calculate the credits

Keeping these records with your tax documents can help support any credit claimed if the South Carolina Department of Revenue requests additional information after your return is filed.