South Carolina did not conform to certain federal tax law changes under the new tax bill. As a result, specific deductions allowed on the federal return must be added back when calculating South Carolina taxable income. The following items must be added back on the South Carolina return. These items are adjusted automatically by the program, unless otherwise indicated.

Addback Reported on Line 1a

The following item is added back to Line 1a of the South Carolina return.

State and Local Tax (SALT) Deduction Addback

The South Carolina addback is the lesser of:

• Itemized deductions in excess of the federal standard deduction that would have been allowed if the standard deduction had been used;

• State and local income taxes or general sales taxes reported on federal Schedule A, Line 5a; or

• The $40,000 federal SALT deduction limit minus deductible property taxes.

Addbacks Reported on Line 1e

The following federal deductions must be added back on South Carolina Form SC1040, Line 1e.

Increased Standard Deduction Amounts

South Carolina does not conform to the increased federal standard deduction amounts. The additional amounts must be added back as follows:

• $750 – Single and Married Filing Separately

• $1,125 – Head of Household

• $1,500 – Married Filing Jointly and Qualifying Surviving Spouse

Overtime Premium Deduction

The full amount deducted on the federal return must be added back.

"No Tax on Tips" Deduction

The full amount deducted on the federal return must be added back.

Enhanced Senior Deduction

Individuals age 65 or older who claim the $6,000 federal deduction must add this amount back on the South Carolina return.

"No Tax on Car Loan Interest" Deduction

The full amount deducted on the federal return must be added back.

Research and Experimental Expenditures

The full amount deducted on the federal return must be added back. This adjustment must be made manually on SC screen 2, if applicable.

Business Asset Deductions

The full amount deducted on the federal return must be added back.

More Info

For additional information, refer to the South Carolina DOR Conformity Update.