Form Sc Sch.tc 9 - South Carolina Credit For Child Care Program (Page 3 of 3) in pdf

Credit for Child Care Program

SC SCH. TC-9 General Information

Part I

A taxpayer that employs residents of South Carolina that establishes a child care program for his employees may claim as

a credit against income tax, bank tax, or insurance premium tax an amount equal to 50% of his capital expenditures in this

state for establishing a child care program not to exceed $100,000. The credit may not exceed 50% of the tax liability, but

may be carried forward for 10 years. Allowable expenditures include mortgage or lease payments, playground and

classroom equipment, kitchen appliances, cooking equipment and real property, including improvements in this state.

Allowable expenditures include donations made by a taxpayer to an Internal Revenue Code Section 501(c)(3)

nonprofit corporation in South Carolina that provides child care services to the taxpayer's employees. The

taxpayer must specify to the nonprofit corporation that the donation is for its child care program. If credit is

taken for donations by a corporation, a deduction to arrive at the net income of the corporation is not allowed.

Part II

A taxpayer that employs residents of South Carolina is also allowed a credit for payments made by the taxpayer to

operate a child care program for his employees in this state or child care payments made directly to independent child

care facilities for the benefit of employees in this state. The credit may be taken against the taxpayer's income tax, bank

tax, or insurance premium tax in an amount equal to 50% of the payments made, not to exceed $3,000 per employee who

benefits from the program. When an employer chooses to make direct payments to a child care facility not operated by the

employer, the costs incurred in the first year for administration of a direct payment program also may be included in the

establishment costs of Part I, Section A. After the start-up year, administrative costs for payments to a direct payment

program may be claimed as a credit not to exceed 2% of the costs. The total credit may not exceed 50% of the tax

liability.

The Child Care Program and operation of the program must meet the licensing, registration, or certification standards

prescribed by law.

For purposes of the credit allowed for payments made directly to an independent child care facility, the taxpayer is

required to retain information concerning the child care facility's federal identification number, license or registration

number, payment amount, and in whose name and for whose benefit the payments were made.

INSTRUCTIONS FOR SC SCH. TC-9

Part I. Include in Part I only those expenses incurred for establishing a child care program.

A. Complete section A of Part I when you will operate the child care program.

B. Complete section B of Part I when you make direct payments to licensed child care facilities which are operated by

others.

Part II. Include in Part II only those expenses incurred for operating a child care program.

A. Complete section A of Part II when you will operate the child care program.

B. Complete section B of Part II when you make direct payments to licensed child care facilities which are operated by

others.

Social Security Privacy Act Disclosure

It is mandatory that you provide your social security number on this tax form if you are an individual taking this credit. 42 U.S.C

405(c)(2)(C)(i) permits a state to use an individual's social security number as means of identification in administration of any tax. SC

Regulation 117-201 mandates that any person required to make a return to the SC Department of Revenue shall provide identifying

numbers, as prescribed, for securing proper identification. Your social security number is used for identification purposes.

The Family Privacy Protection Act

Under the Family Privacy Protection Act, the collection of personal information from citizens by the Department of Revenue is limited to

the information necessary for the Department to fulfill its statutory duties. In most instances, once this information is collected by the

Department, it is protected by law from public disclosure. In those situations where public disclosure is not prohibited, the Family

Privacy Protection Act prevents such information from being used by third parties for commercial solicitation purposes.

32913022

Form Sc Sch.tc 9 - South Carolina Credit For Child Care Program Page 3

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