New SC College Tax Credit In Effect

There’s only one certainty when it comes to college tuition: It’s expensive, especially in a state where college costs are ranked the highest in the Southeast (that’s you, South Carolina). But, chin up, Palmetto State. Things just got a little easier. A SC college tax credit increased sharply this month for South Carolina residents attending in-state colleges, universities, and technical colleges.

The value of the tax credit now stands at $1,500, up from $350 for a two-year school and $850 for a four-year school. The credit is a provision of the 2017 law that also raised South Carolina’s tax on gasoline, increased taxes and fees for auto purchases and registration, and imposed a tax penalty for owners of electric and hybrid vehicles.

The South Carolina Tuition Tax Credit is not income-based and is fully refundable, so even those who owe little or no state income tax can benefit. There is no grade-point-average requirement either. This is a simple, across-the-board tax credit for any South Carolina resident responsible for tuition at a two- or four-year college or university. The tax credit is based upon 50% of tuition and fees paid, after deducting any scholarship funds.

The full list of rules for this tax credit will disqualify many students, but, here are a few key points taken from Department of Revenue guidance:

To be eligible a student must:

  • Within 12 months before enrolling, have graduated from a South Carolina high school or home school program, or a prep school outside of South Carolina while being a dependent of a legal resident of South Carolina.
  • Be admitted, enrolled, and classified as a degree-seeking undergraduate or be enrolled in a certificate or diploma program of at least one year and be in good standing at the institution.
  • Be eligible for in-state tuition.
  • Have completed at least 30 credit hours at the end of the taxable year for which the credit is claimed, or its equivalent as determined by the S.C. Commission on Higher Education. Note that a first-semester student this fall who completes 15 credit hours would also qualify.

But a student, or tuition-paying parent, can’t get the tax credit if the student:

  • Obtained a GED.
  • Received a Palmetto Fellows scholarship or Legislative Incentives for Future Excellence, or LIFE, scholarship during the tax year.
  • Is in default of a federal Title IV or South Carolina educational loan or owes a refund on a South Carolina student financial aid program.
  • Has been adjudicated delinquent or been convicted or pleaded guilty or nolo contendere to any felonies, or any alcohol or drug-related offenses. Note: misdemeanor alcohol and drug offenses only disqualify the student for the tax year in which they were adjudicated.

The tax credit can be claimed for four consecutive years of tuition, which works out to five tax years for a student starting in the fall.

If you or your child or dependent is attending a college or university in South Carolina, give us a call. We can help you navigate this somewhat complicated tax credit. Every little bit helps with college tuition, after all!

 

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