South Carolina’s New Job Tax Credit Is Worth a Closer Look

  • Tax strategies
  • 11/30/2022
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Key insights

  • In 2019, South Carolina greatly increased the tax benefit per job for businesses located in Tier 3 and Tier 4 counties.
  • Companies located in South Carolina should review their circumstances to determine if they have an opportunity to benefit from the program.
  • CLA can help South Carolina businesses identify, secure, and monetize credit and incentive opportunities.

Understand state and local incentives before deciding to invest.

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The South Carolina new job tax credit is an incentive offered to new and expanding businesses for increasing employment in the state. The nonrefundable income tax credit can be very generous, particularly for businesses located in certain counties. The South Carolina Department of Revenue ranks South Carolina counties by tiers using income and unemployment data from the South Carolina Department of Employment and Workforce.

Since 2019 the benefit per job of the credit has increased greatly for those businesses located in Tier 3and Tier 4 counties:

County tier designation    Credit per new job 
 Tier 1   $1,500 
 Tier 2  $2,750 
 Tier 3  $20,250 
 Tier 4  $25,000 

Industries that qualify for the credit include manufacturing, processing, tourism, warehousing, banking, distribution, and research and development. Generally, taxpayers must increase employment by at least 10 new full-time jobs a year. The number of new jobs is calculated as the increase in the average monthly employment from one year to the next and the jobs must be maintained for two years before they generate a credit.

The credit can be used against individual income tax, corporate income tax, bank tax, or insurance premium tax, which can eliminate up to 50% of a company’s liability. Unused credits may be carried forward 15 years from the year earned. Businesses located in multi-county industrial parks can also generate an additional $1,000 per job. Taxpayers with 99 or fewer employees may qualify for the Small Business Jobs Credit.

How we can help

This is only a high-level summary of the New Jobs Credit and businesses should understand the underlying details and criteria to obtain the credit. CLA can help your business by reviewing your location and employment history to see if you may be eligible for a new jobs tax credit. Additionally, our tax professionals can review your future hiring plans to help determine a beneficial approach. Reach out for more information or to discuss opportunities relative to the South Carolina tax credit program.

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