Save Your Gas Receipts, South Carolina (and check out these other tax savings effective January 1)

Share to:

When the clock struck midnight New Year’s Day, a new South Carolina gas tax credit went into effect. The Palmetto State officially began allowing state residents to get an income tax credit equal to the two-cent increase in the gas tax that went into effect in July (the increased motor user fee established by the South Carolina Infrastructure and Economic Development Reform Act). So, start saving those gas receipts, South Carolinians, and check out the following.

Here’s what you need to know.

  • Taxpayers can claim the motor fuel income tax credit when filing their state income tax returns beginning in 2019. (The credit will be applied to your 2018 SC Individual Income Taxes which are filed in 2019.)
  • This is a refundable credit on up to two vehicles per resident taxpayer. If filing a joint return, the credit may be available for up to 4 vehicles depending on the name on the registration.
  • To calculate and claim the credit amount and for personal tax records, you must save receipts and invoices from fuel purchases beginning in January 2018 and vehicle preventative maintenance costs beginning in January 2018, as you may opt to get the tax credit instead for maintenance (i.e. new tires and oil changes).
  • Taxpayers receive a credit on the lesser amount paid for either the motor fuel user fee increase or the vehicle’s preventative maintenance.
  • Taxpayers will calculate and claim the credit on Form I-385 when filing state income tax returns in 2019. (This form will be available in January 2019.)
  • This credit is also available for all entity types including C Corp, S Corp, Partnership, Single Member LLC, Sole Proprietor, and LLC.

The gas tax credit isn’t the only tax change to impact South Carolina this year. The following also went into effect January 1.

  • Any resident paying for a student to go to a South Carolina college may claim a deduction for 50% of tuition, up from 25%, for a maximum deduction of $1,500 a year.
  • 2018 will also start the slow introduction of a new earned-income tax credit. About 150,000 taxpayers will get a tax credit worth $286, on average, in 2023.
  • State property tax on manufacturers drops from 10.5% to 9%.
  • Vehicle registration fees do increase this year. People under age 65 will pay $40 (a $16 increase) and drivers over 65 will pay $36. Electric car owners will have to pay a $120 one-time fee when they register ad hybrid owners must pay $60. All the revenue from the new registration fees will go to pay for roads and bridges.

So, overall, some pretty good news for SC this year — that is unless you want to purchase a large cat, an ape, or a non-native bear. Those things are now banned by state law.

 

 

Questions? Comments? We’d love to hear them below!

Share to:

Comments

  1. So, is it imperative that we file the preventative maintenance amounts if we file the fuel totals? The idea of “opting” has me slightly confused. Can it be one or the other, or must it be both?
    Thank you!

  2. I do not have gas receipts, but I have a list of transactions on my gas card that is linked to my account. It shows date, time, the location of gas station, transaction number and the cost of the gas. However, it does not show how many gallons.

    Would this transaction log be acceptable as proof of gas purchases?

    • Justin Schweizer says:

      I don’t believe so. The form and calculations are based on total gallons purchased so you would need proof of that to be safe according to the literature. Being the first year this is available, the risk of audit could be higher. The old saying “Better safe, than sorry” should be on everyone’s mind.

      Thanks for reading!

  3. Elizabeth B. says:

    Can we use credit card statements showing gas purchases in place of the actual receipts?

    • Justin Schweizer says:

      Hi Elizabeth,

      Funny, this question just came up yesterday in the comments. 🙂 Here’s how I responded:

      “I don’t believe so. The form and calculations are based off of total gallons purchased so you would need proof of that to be safe according to the literature. Being the first year this is available, the risk of audit could be higher. The old saying “Better safe, than sorry” should be on everyone’s mind.”

      Hope that helps.

  4. I am trying to claim my fuel however (using Turbo Tax) I do not see anywhere to put this information in. Help!?

    • Justin Schweizer says:

      Hi Kayla,

      While we cannot troubleshoot Turbo Tax (it’s not a program we use and we never recommend DIY tax software because too many deductions and credits get skipped), we can say that form I-385 is the one you’ll need to claim the motor fuel income tax credit.

      Hope that helps.

      Best of luck.

  5. Shelley Rubino says:

    Where can we find the Form I-385?

  6. Is this only for gas purchases made in SC?

    • Justin Schweizer says:

      This credit only applies to the gas you purchased in South Carolina – as a resident of South Carolina – and doesn’t apply for any gas purchased outside the state.

Speak Your Mind

*