Questions & Answers

What are some examples of other additions to income?

Additions for Federal Itemized Deductions of Contributions Claimed as South Carolina Credits
South Carolina doesn't allow you to take both a South Carolina credit and a federal deduction for the same charitable contributions. If, on your federal return, you deducted all or part of the amount of the contributions used to claim any the following credits, you must include the amount you deducted federally that resulted in the credits as a South Carolina addition. NOTE: This addition is only necessary if you're taking itemized deductions instead of the standard deduction.

The following South Carolina credits are claimed by making charitable contributions:

  • The Nonrefundable Educational Credit for Exceptional Needs Children's Fund (Form TC-57) for contributions made to a nonprofit scholarship funding organization
  • The Child Care Program Credit (Form TC-9)
  • The Community Development Credit (Form TC-14)
  • The Industry Partnership Fund Credit (Form TC-36)
More information about handling charitable contributions for South Carolina credits when you are taking federal itemized deductions.

Other Additions
  • The federal net operating loss when it is larger than the South Carolina net operating loss being claimed should be included as a South Carolina addition.
  • Any expenses deducted on your federal return related to any income not taxed by South Carolina should be included as a South Carolina addition. Some examples are investment interest to out-of-state partnerships and interest paid to purchase United States obligations.
  • Foreign areas allowances, cost of living allowances, or income from possessions of the United States should be included as a South Carolina addition.
  • For qualifying investments made after June 30, 1998, you must reduce the basis of the qualifying property to the extent the Capital Investment Tax Credit is claimed. Any resulting reduction in depreciation should be included as a South Carolina addition.
  • Any charitable contribution of land deducted under IRC Section 170 should be included as a South Carolina addition unless the contribution also meets the requirements of S.C. Code Section 12-6-5590.
  • A business must include any amount paid for services performed by an unauthorized alien as a South Carolina addition if the amount is $600 or more a year. An "unauthorized alien" is a person who is not admitted for permanent residence and not authorized to be employed either under federal law or by the U.S. Attorney General.
  • If you make a change in the accounting method of your business to conform in the same manner and the same amount used on your federal return you may have an addition or a subtraction. At the end of the federal adjustment, any balance will continue until fully adjusted.
  • The installment method of reporting is to be adjusted if the entire sale has been reported for state purposes, or if the entire sale has been reported for federal purposes and you wish to continue on an installment basis for state purposes. This may be an addition or a subtraction.
  • You should adjust the federal gain or loss to reflect any difference in the South Carolina basis and federal basis. This may be an addition or a subtraction.

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