Sc Sch Tc-4sb -Small Business Jobs Credit (Page 6 of 14) in pdf

County designations

Beginning January 1, 2011, there are four designations for South Carolina counties, from Tier I (least favorable) through Tier IV (most

favorable). County designations are updated each year with equal weight given to the unemployment rate and per capita income.

Designations are usually determined in December and effective as of January 1 of the following year.

Amount claimed

If the gross wages of the full-time jobs created are 120% or more of either the county's or the State's per capita income, the initial

amount of credit is:

$8,000 for each new full-time job created in Tier IV counties;

$4,250 for each new full-time job created in Tier III counties;

$2,750 for each new full-time job created in Tier II counties; and

$1,500 for each new full-time job created in Tier I counties.

If the gross wages are less than 120% of both the county's and State's per capita income, the initial amount of credit is:

$4,000 for each new full-time job created in Tier IV counties;

$2,125 for each new full-time job created in Tier III counties;

$1,375 for each new full-time job created in Tier II counties; and

$750 for each new full-time job created in Tier I counties.

Taxpayers with qualifying jobs located on property where a response action has been completed pursuant to a non-responsible party

voluntary cleanup contract pursuant to the Brownfields Voluntary Cleanup Program are allowed an additional $1,000 credit for each new

full-time job created. The additional credit is not allowed to a "responsible party".

The maximum aggregate credit of job tax credits (TC-4, TC-4SA, and TC-4SB) and employer tax credits (TC-12 and TC-12A) that may

be claimed in any tax year for a single employee is $5,500, except for employees in Tier IV counties.

The number of new and additional new full-time jobs is determined by comparing the monthly average number of full-time employees

subject to South Carolina income tax withholding in the applicable county for the tax year with the monthly average number in the base

tax year. To calculate the monthly average number of full-time employees in the first year of operation in this State, a taxpayer may use

the actual months in operation or a full 12-month period. If a taxpayer's business is in operation for less than 12 months in a year, the

number of new and additional new full-time jobs is determined using the monthly average for the months the business is in operation.

After qualifying for this credit, the taxpayer may obtain credit for additional new full-time jobs created in Years 2 through 6 for

up to five years each, beginning with the tax year in which the job is created. A taxpayer may claim credit only for job levels

maintained in the tax year that the credit is claimed. No credit is allowed if the net employment increase for that taxpayer falls

below two (2).

Credit transfer

A taxpayer merger, consolidation or reorganization, where tax attributes survive, does not create new eligibility in the succeeding

taxpayer. Unused job tax credits may be transferred and continued by the succeeding taxpayer subject to the limitations of Section

12-6-3320. When one taxpayer transfers all or substantially all of the assets of its trade or business or operating division to a second

taxpayer, the first taxpayer may assign its related right to credit to the second taxpayer, as long as the required number of new jobs for

that amount of credit is maintained.

Flow-through

A partnership, S corporation or limited liability company (LLC) taxed as a partnership or S corporation may pass through the credit

earned to each shareholder, partner or member. The credit earned by an S corporation owing corporate level income tax must be used

first at the entity level. Only the remaining credit passes through to each shareholder.

The allocation of credit to a shareholder, partner or member must equal the percentage of shareholder's stock or partner's or member's

interest for the tax year multiplied by the amount of the credit earned by the entity. The entity earning the credit may not carry over

credit that passes through to its shareholders, partners, or members.

Amount used

The amount of credit used in a year may not exceed 50% of the taxpayer's South Carolina income tax, bank tax, or insurance premium

tax liability. For credit earned by and flowing through a partnership, S corporation or LLC taxed as a partnership or S corporation, the

credit may not exceed 50% of the shareholder's, partner's, or member's corporate or individual income tax or bank tax liability.

Carryforward

Unused credits may be carried forward for 15 years. Credits carried forward must be used in the order claimed. Credits earned by and

flowing through a partnership, S corporation or LLC taxed as a partnership or S corporation may be carried forward by the partner,

shareholder or member for 15 years from the close of the tax year in which the credit is earned by the S corporation, partnership, or

LLC. Taxpayers claiming this credit and a corporate tax moratorium may carry forward unused amounts until after the moratorium

Sc Sch Tc-4sb -Small Business Jobs Credit Page 6

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