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

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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.

 

 

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