Learn More about Income Tax Deductions and Credits for South Carolina Families

South Carolina families can save more money on their state Individual Income Tax bills this year as a result of increased deductions and credits.​
With tax season opening soon, the South Carolina Department of Revenue (SCDOR) reminds families to review deductions and credits they may be able to claim on their state tax returns. 2023 Individual Income Tax returns are due Monday, April 15, 2024.Here are some common state tax credits and deductions available for families, and how they’ve changed for this tax year:

• Earned Income Tax Credit (EITC): The EITC is designed to help low- to moderate-income working individuals or couples, particularly those who have children. South Carolina’s EITC has increased to 125% of the federal EITC this tax year. You should first claim the EITC on your federal return; if you are not eligible for and do not claim the federal credit, you cannot claim the state credit. This credit is open to full-year South Carolina residents only.
  • More than 108,000 returns claimed more than $185 million in SC Earned Income Tax Credits for tax year 2022.
  • Use the IRS’s EITC Assistant to check your eligibility for the federal EITC.
  • South Carolina’s Earned Income Tax Credit was adopted in 2018 and phased in over six years. It is now fully phased in for tax year 2023
  • The IRS’s annual EITC Awareness Day is tomorrow, January 26, 2024. Almost 25% of eligible taxpayers don’t claim the EITC, so we encourage taxpayers to spread the word about this important credit.
• Child and Dependent Care Credit: For full-year South Carolina residents, the credit is calculated at 7% of the federal child and dependent care expense. The maximum credit allowed is now $210 for one child or $420 for two or more children.
  • Taxpayers claimed more than $23 million in Child and Dependent Care Credits for tax year 2022.
  • Part-year residents or nonresidents are not eligible for this credit unless they are a resident of a state that offers a credit for child and dependent care expense to nonresidents of that state.
  • You cannot claim this credit if your filing status is Married Filing Separately.
• Two Wage Earner Credit: This credit is available to taxpayers whose filing status is Married Filing Jointly when both spouses have earned income taxed to South Carolina. For tax year 2023, the credit is 0.7% of the lesser of $50,000 or the South Carolina qualified earned income of the taxpayer with the lower qualified income for the taxable year. The maximum amount of credit available has increased to $350.
  • Taxpayers claimed more than $80 million in Two Wage Earner Credits for tax year 2022.
  • This credit cannot be claimed if your filing status is Single, Married Filing Separately, Qualifying Surviving Spouse, or Head of Household.
• Dependent exemptions: For tax year 2023, South Carolina has increased its dependent exemption to $4,610 for each eligible dependent, including both qualifying children and qualifying relatives.
  • More than 727,000 returns claimed dep endent deductions for tax year 2022, including more than 240,000 returns that claimed exemptions for children under age 6.
• Future college payment deductions: Contributions to the SC College Investment Program, (known as Future Scholar) or the SC Tuition Prepayment Program are tax-deductible. You may deduct 100% of any contributions to the SC College Investment Program made between January 1, 2023 and April 15, 2024 and 100% of any contributions to the SC Tuition Prepayment Program made between January 1, 2023 and December 31, 2023.
  • More than 33,000 returns claimed more than $356 million in future college payment deductions for tax year 2022.

Learn more about all state tax credits, including eligibility information, at dor.sc.gov/taxcredits.