Many residents of South Carolina who received a tax rebate from the state can now exhale a little bit easier.
The IRS clarified on Friday that, if recipients meet certain criteria, they won’t need to report the rebate on their tax returns.
Tax Rebate Checks
The announcement comes days after the IRS advised people who received tax refunds to postpone filing their returns until it could determine whether they were subject to federal taxes.
The IRS states that if a South Carolinian received a refund of state taxes paid and either claimed the standard deduction or itemized their deductions without receiving a tax benefit, they are not required to report the payment for federal tax purposes.
To put it another way, the rebate may not be considered income for federal tax purposes unless the recipient received a tax benefit in the year the taxes were deducted.
Last year, South Carolinians were among the millions of Americans from various states who received some sort of tax rebate check, primarily to provide relief from financial hardship, such as inflation. Recently, the IRS has been attempting to determine whether those rebates should be subject to federal income tax.
The tax rebate won’t be subject to state taxes, according to the South Carolina Department of Revenue.
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Refunds Are Based On Your Tax Liability
The amount of the rebate that applicants are eligible to receive will vary according to their tax liability, which is the sum of state income tax that a South Carolina resident is required to pay for the 2021 tax year.
Residents who still owe the department an unpaid individual income tax bill may find that the amount they receive is less than their tax obligation. The amount that a recipient of this rebate would receive would be reduced by the remaining balance of that bill.
The rebate will be equal to the tax liability if a resident’s tax obligation is less than $800. Each recipient will receive exactly $800, regardless of their tax obligation.
Most South Carolina residents ought to have received their checks by now. Prior to October 17, 2022, there was a filing deadline for the rebate. To February 15, it was extended. The payment was issued in December, but applicants who submitted their 2021 taxes by the October deadline already received it.
Online rebate trackers are available to recipients who are waiting for their payment. They must have either their Social Security number or their unique tax identification number in order to use this tracker, in addition to line 10 from their 2021 SC1040.
You can get more details about this rebate by calling 803-722-1958 or going to the Revenue Department’s website.
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