What are examples of other subtractions from income?

  • 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 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.
  • Capital expenses amortized under federal statutes will be the same for state purposes. At the end of the federal amortization, the balance of capital expense amortized will continue until fully amortized for state purposes. The amortized amount is a subtraction from your income.
  • Legislators within a 50-mile radius of the State House are allowed to subtract travel expenses.
  • 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. Attach a copy of the letter you received at the time of adoption which certified the person as a "special needs child." A "special needs child" means a person under the age of 18 at the time of adoption, who is a dependent of a public or private nonprofit adoption agency, is legally free for adoption and has been determined by the agency to have specific conditions.
  • 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 a subtraction.
  • Adjust the federal gain or loss to reflect any difference in the South Carolina basis and federal basis. This may be an addition or subtraction.
  • Retirement income paid by the United States government for service in the Reserves or National Guard is not taxed for South Carolina purposes. You can subtract the entire amount of any stipend paid by the State of South Carolina for National Guard Service.
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 as follows:
Inactive Reserve time + Inactive National Guard time = Exclusion Percent
Total Military time (Active and Inactive)

Determine the excludable amount of your military retirement income by multiplying it by the percentage of exclusion as follows:
Exclusion Percent X Total taxable military retirement income shown on federal return = Excludable military retirement income

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