South Carolina’s Earned Income Tax Credit (EITC) stands out as one of the most substantial in the country, offering individuals the chance to receive more than $9,000. This amount surpasses even what is available through the federal version of the EITC. Although the EITC doesn’t get as much attention as the Child Tax Credit (CTC), it holds the potential to put more money back in taxpayers’ pockets.
Some states, including South Carolina, offer their own versions of the EITC, which can lead to larger refunds than those provided by the federal government. Below, we’ll delve into how residents of South Carolina can tap into this opportunity and potentially secure over $9,000 through the state’s EITC.
Understanding South Carolina’s Enhanced Earned Income Tax Credit
In the previous year, South Carolina’s government made improvements to its EITC, allowing eligible recipients to receive up to 125% of what they’d qualify for under the federal EITC. Despite its benefits, the EITC remains lesser-known compared to the CTC. The Internal Revenue Service (IRS) has identified that about 20% of eligible workers fail to claim their EITC benefits.
The IRS, along with its nationwide partners, strongly encourages individuals to look into this frequently missed opportunity. According to the IRS, people who typically don’t file tax returns might still be eligible for significant EITC amounts.
For the 2023 fiscal year, the federal EITC could yield refunds up to $7,430, meaning the enhanced rate in South Carolina could lead to a maximum benefit of approximately $9,287.50. This credit is aimed at supporting individuals and families with low to moderate incomes.
To apply for South Carolina’s EITC, residents need to file their 2023 tax returns within the designated filing period, from January 29th to April 15th.
Eligibility for South Carolina’s EITC mirrors the federal requirements, which include:
- Earning under $63,398 in 2023.
- Having investment income below $11,000.
- Possessing a valid Social Security number (those with ITINs are ineligible).
- Being a U.S. citizen or legal resident throughout the entire year.
- Not filing Form 2555 or 2555-E (related to foreign earned income).
- Not being claimed as a dependent on someone else’s return.
- Not filing taxes as married but separately.
Claiming South Carolina’s EITC requires first claiming the federal EITC. Without eligibility for the federal credit, the state credit remains out of reach. In 2023, the EITC benefited over 420,000 households in South Carolina, distributing around $1.1 billion—an average of $2,641 per household. Nationwide, approximately 23 million workers and families received about $57 billion through the EITC, averaging $2,541 each, as reported by the IRS.