Questions & Answers

What contributions for South Carolina credits qualify as federal itemized deductions?

Qualifying donations to charities can be entered on your federal return on the Menu Path: Deductions/Credits > Itemized Deductions > Donations screen to minimize your tax liability.

The amount of the donation for which you receive a South Carolina credit won't qualify as a federal itemized deduction very often, but there are some exceptions.

If, on your federal return, you deducted all or part of the amount of the contributions used to claim any South Carolina credit, you might need to remove the South Carolina credit amount from your federal itemized deductions and include a South Carolina addition to offset the federal deduction. This addition is only necessary if you're taking itemized deductions instead of the standard deduction.

For example, if you donate $1,000 to a qualifying charity and receive a South Carolina credit of $200, you can still claim $800 as an itemized deduction on your federal return. However, you will have to add the $800 back into your South Carolina income as an Other Addition, since the agreement for the credit was that you were allowed the $200 credit for the $1000 donation, and not an $800 deduction in addition to the $200 credit.

For a second example, if you donate $1000 to a qualifying charity and receive a South Carolina credit of $1000, you should not claim any of this donation as an itemized deduction on your federal return. In this case, since you are not including the donation in your itemized deductions, you wouldn't need a South Carolina addition.

If you find greater benefit on your South Carolina return by taking the contribution as a deduction only instead of a credit, you can take the entire amount of your contributions as a federal itemized deduction without an addition on your South Carolina return by removing the charitable contributions credit(s) from your South Carolina return. However, most of the time a credit will be more beneficial than a deduction.

Let's Get Started

Footer

Footer sections

© 2002-2021 FreeTaxUSA, a TaxHawk, Inc. owned and operated website - Terms of Use | Privacy Statement | Accessibility