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GENERAL INSTRUCTIONS

Except for jobs created in distressed counties, the maximum aggregate credit that may be claimed in a single year

under this credit and the jobs tax credit (SC SCH. TC-4), small business job tax credit (SC SCH. TC-4SB), or small

business alternative job tax credit (SC SCH. TC-4SA) is $5,500 for each employee.

The credit exists only for the first three consecutive years of employment of qualified employees.

This credit is limited to:

(1) twenty (20%) percent of wages for each full month of the first twelve months of employment;

(2) fifteen (15%) percent of wages for each full month of the second twelve months of employment; and

(3) ten (10%) percent of wages for each full month of the third twelve months of employment.

Qualifying wages include only those wages paid to employees who received Family Independence (Aid to Families with

Dependent Children or AFDC) payments for three months immediately preceding the month of employment. Submit an

employee release, and request certification of Family Independence eligibility by writing to the SC Department of Social

Services by the fifteenth (15th) day of the first month after the end of the taxable year in which the employee is hired.

In order to claim this credit, the employer must make health insurance available to the qualified employee on the same

basis and under the same conditions available to all employees, including employer contributions and employer-imposed

waiting periods. Although required to make health insurance available, the employer is not required to make health

insurance payments on behalf of the qualified employee unless the employer makes health insurance payments on behalf

of nonqualified employees. Even if an employer-imposed waiting period exists, the credit begins from the date the

qualified employee is hired. An employer imposing a waiting period of more than twelve months may not claim this credit.

The employer may not claim this credit if the position filled by the former AFDC recipient was made available due to the

termination or forced resignation of an employee for the purpose of obtaining the tax credit.

For each new job created in a distressed or least developed county, an employer that qualifies for this credit qualifies for

an additional credit amount of $175 for each month during the first thirty-six months of employment per qualifying

employee. See SC SCH. TC-12-A for more information.

This credit may be carried forward fifteen years from the taxable year in which the credit is earned.

Example - One qualifying employee is hired June 10, 2001, earning $1,500 per month. For a calendar year employer, the

first year tax credit is 6 (number of full months of employment) x $1,500 x 20% = $1,800. If this same employee remains

employed during all of 2002 at the same wage, the credit is computed as follows:

6 x $1,500 x 20%

$1,800

6 x $1,500 x 15%

$1,350

Total credit for 2002

$3,150

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.

33272022

Form Sc Sch.tc 12 - Credit For Employers Hiring Recipients Of Family Independence Payments Page 2

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