Form Sc 990-T - Exempt Organization Business Tax Return (Page 4 of 4) in pdf

INSTRUCTIONS - EXEMPT ORGANIZATIONS

Filing Requirements - In general, every corporation or unincorporated entity operating in South Carolina that is required

to file federal Form 990-T to report unrelated business income must file SC990-T with the South Carolina Department of

Revenue.

A copy of the federal Form 990-T and supporting schedules must be attached to SC990-T.

Basis of Return - The unrelated business taxable income as shown on federal Form 990-T is the basis for South

Carolina taxable income plus or minus the modifications required by state law. For information on these state

modifications see the instructions for SC1120.

When to File - SC990-T must be filed on or before the fifteenth day of the fifth month after the end of the tax

year. If any tax is anticipated to be due, a request for an extension of time must be filed using SC1120-T, on or before

the day the tax return is due. Any amounts shown to be due must be paid when the SC1120-T is filed. If no tax is

anticipated to be due, and the taxpayer has requested a federal extension of time to file a federal income tax return, the

department shall accept a copy of a properly filed federal extension if the corporate return is received within the time

extended by the Internal Revenue Service.

Line 5 Instructions- After adding the federal net operating loss (NOL) to the federal taxable income in Schedule A, the

South Carolina (SC) NOL is subtracted on Line 5. The NOL deduction is the SC net operating loss carryover that can be

deducted in the current tax year. To be deductible, an NOL must have been incurred in an unrelated trade or business

activity.

PENALTIES AND INTEREST

Avoid penalties and interest by correctly filing and paying the tax when due.

If an organization fails to file its tax return when due (including any extensions of time for filing) it may be subject to a

failure to file penalty of five percent of the amount of the tax due if failure is for not more than one month, with an

additional five percent for each additional month or fraction thereof during which the failure continues, not exceeding

twenty-five percent in the aggregate must be added. The penalty is calculated on the amount of tax shown due on

the return reduced by any amounts paid on or before the date prescribed for payment of the tax. Additionally, the

Department may assess a late filing penalty of up to $500.00 in addition to the above specified late filing penalties.

If an organization fails to pay any tax on or before the due date, a failure to pay penalty must be added to the tax.

The penalty shall be one-half of one percent of the amount of the tax if the failure is for not more than one month,

with an additional one-half of one percent for each additional month or fraction thereof during which the failure

continues, not exceeding twenty-five percent.

If an organization underpays its tax liability and the underpayment is due to negligence or disregard of regulations,

there must be added a negligence penalty of five percent of the underpayment plus fifty percent of the interest

payable.

If an organization substantially understates its tax, it will be charged a substantial understatement penalty of

twenty-five percent of the understatement. A substantial understatement is the greater of ten percent of the tax

liability or ten thousand dollars. In the case of an S Corporation or a personal holding company a substantial

understatement is the greater of five thousand dollars or ten percent of the tax liability.

If an organization fails to make estimated tax payments when due it may be subject to an underpayment penalty

for the period of underpayment. For more information see SC2220 and the instructions to SC1120.

If an organization fails to remit the tax due it will be charged interest at the rate provided under Internal Revenue

Code Sections 6621 and 6622. The interest must be calculated on the full amount of tax or portion thereof, exclusive

of penalties, from the time the tax was due until paid in its entirety.

Signature - The return must be signed by an officer of the organization duly authorized to make the return on behalf of

the organization.

Mail return to South Carolina Department of Revenue, Corporation Return, Columbia, S.C. 29214-0100.

33154022

Form Sc 990-T - Exempt Organization Business Tax Return Page 4

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