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Workforce Development - Family Independence Tax Credit - South Carolina

An employer who hires a person who has received Family Independence Program (FIP) payments for the ninety days immediately before his/her date of employment is eligible for an income tax credit of:

      20% of the wages paid to the employee for each full month of employment for the first twelve months of employment;

      15% of the wages paid to the employee for each full month of employment during the second twelve months of employment;

      10% of the wages paid to the employee for each full month during the third twelve months of employment.

The maximum aggregate credit that may be claimed in a tax year for a single employee is $5,500.00 for this credit and the Job Tax Credit except in a Distressed county where there is no cap.

An additional $175 credit (per month, per full time employee) is allowed for employers located in a Distressed or Least Developed county during the first 36 months, up to $2,100 for each qualifying year.

The Family Independence Tax Credit is not allowed unless the employer also makes available full individual or participating family health care coverage for the benefit of each qualified employee for which the credit is earned. The employer is not required to pay for all or part of any health insurance coverage for family independence payment recipients hired in order to claim the credit if the employer does not pay for all or part of health insurance coverage for any other employee. Employers must make health insurance available to a Family Independence Program recipient on the same basis and under the same conditions as any other employee.

An employer cannot terminate or force the resignation of an existing employee in order to create a vacancy to claim the Family Independence credit.

The South Carolina Department of Social Services and the South Carolina Employment Security Commission must make information available to employers interested in hiring family independence payment recipients and must provide documentation to employers verifying a person's status as a family independence payment recipient. The employer must request documentation of an employee from the South Carolina Department of Social Services in writing at the time of hire and no later than the fifteenth day after the end of the taxable year of the employer in which the Family Independence Program recipient was hired. The Department of Social Services has thirty days in which to either issue or deny this documentation.

Any unused credit may be carried forward for 15 years.

Percentages and amounts shown above were current as of March 2004.

County Rankings

The final ranking of counties for new, full time jobs created in tax years which begin in 2004, where the job tax credit was first earned after June 18, 2002, and increases in such jobs, is listed below for "Distressed" and "Least Developed" counties.

Distressed Counties

Chester
Chesterfield
Clarendon
Dillon
Hampton
Lee
Marion
Marlboro
McCormick
Orangeburg
Union
Williamsburg

Least Developed Counties

Abbeville
Allendale
Bamberg
Barnwell
Cherokee
Edgefield
Fairfield
Georgetown
Jasper
Laurens
Saluda

Additional Information

Further information about these tax credits may be obtained by calling the S.C. Department of Revenue, Tax Credit Division at 803-898-5402.

South Carolina Code 12-6-3470 authorizes the Family Independence Tax Credit. It is available online at:
http://www.scstatehouse.net/code/t12c006.htm

For information on each taxable year for county classifications, and the links to the forms for filing the tax credit (SC SCH. TC-12 and SC SCH. TC-12-A), see the South Carolina Department of Revenue website at:
http://www.sctax.org/default.htm.

See also:

Workforce Development - Community and Workforce Development

Workforce Development - Overview

Source

South Carolina Tax Incentives for Economic Development, 2003 Edition, available at:
http://www.sctax.org/NR/rdonlyres/CF4103A2-C810-475D-8072-125A3C64B88F/0/TaxIncentive2003.pdf

Document titled "State and Federal Employment Related Tax Incentives Benefiting Employers & Individuals", created by Jim Love, Director and Milton Greene, Economic and Business Affairs, SC Department of Social Services made available to ESI as document file taxincentivematrix52503.doc.


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