How does South Carolina individual income tax conform to the federal Tax Cuts and Jobs Act and related laws (per SC IL #19-7)?

Plain-English summary

This Information Letter explains how South Carolina's individual income tax lines up with the federal Internal Revenue Code as of February 9, 2018. The bridge is the 2018 SC Taxpayer Protection and Relief Act (SC Act No. 266), enacted October 3, 2018, which adopts many — but not all — of the individual changes in the federal Tax Cuts and Jobs Act of 2017 (TCJA), along with extender provisions in the Bipartisan Budget Act of 2018 and disaster-relief provisions.

For individuals, the TCJA changes South Carolina generally follows include lower income tax rates and new brackets, a larger standard deduction, suspension of personal exemptions, a limited state-and-local-tax deduction, a temporarily reduced medical-expense threshold, and elimination of miscellaneous itemized deductions. Most of these federal changes apply to tax years 2018 through 2025. The SC Act also adds distinctly South Carolina items: a deduction for dependents, a special deduction for dependents under age six, and income tax bracket adjustments.

The letter walks through specific extender provisions South Carolina adopts (for example, the exclusion for discharged qualified principal-residence indebtedness under IRC § 108, treatment of mortgage insurance premiums as residence interest under § 163(h)(3)(E)(iv), and the qualified-tuition deduction under § 222(e)) and disaster-relief provisions tied to hurricanes affecting South Carolina. It also flags that South Carolina does not adopt the IRC § 72 penalty provisions on certain retirement-plan distributions. An attached chart lists the individual TCJA provisions and whether South Carolina adopts each.

Because it is a general summary tied to a specific conformity date, it is a starting map, not the final word.

What this means for you

If you file a South Carolina individual return

Many federal TCJA outcomes (standard deduction, brackets, suspended personal exemptions) carry over to your South Carolina return, but South Carolina layers on its own dependent deductions and bracket adjustments and departs from federal law in places (such as the § 72 retirement-distribution penalties). Use the attached chart to check a specific provision.

If you are relying on a particular deduction or exclusion

Confirm both that South Carolina adopts that IRC section and that the conformity date still reaches it — this letter is fixed as of February 9, 2018, and later South Carolina legislation has moved the conformity date forward.

Common questions

Q: What South Carolina law adopts the TCJA changes?
A: The 2018 SC Taxpayer Protection and Relief Act (SC Act No. 266), enacted October 3, 2018.

Q: Does South Carolina follow every TCJA individual provision?
A: No. The letter adopts many but attaches a chart showing, provision by provision, whether South Carolina adopts each individual TCJA section, and it identifies items South Carolina does not adopt (such as IRC § 72 retirement-distribution penalties).

Q: Can I rely on this summary as the current law?
A: No. It is a general summary as of February 9, 2018; South Carolina's conformity date has since been updated, so verify the current year and the original code sections.

Subject

Summary of South Carolina Individual Income Tax Conformity to the Internal Revenue Code through February 9, 2018

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL19-7.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214-0575

SC INFORMATION LETTER #19-7

SUBJECT:

Summary of South Carolina Individual Income Tax Conformity to the
Internal Revenue Code through February 9, 2018
(Income Tax)

DATE:

March 13, 2019

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the public to
announce general information useful in complying with the laws
administered by the Department. An Information Letter has no
precedential value.

INTRODUCTION
On October 3, 2018, the General Assembly enacted the “SC Taxpayer Protection and Relief Act”
(SC Act) 1. The SC Act adopts many of the federal tax changes and new tax provisions enacted in
the Tax Cuts and Jobs Act of 2017 (TCJA) 2, as well as relevant federal tax “extender” provisions
in the Bipartisan Budget Act of 2018 (Bipartisan Budget Act) 3 and disaster relief provisions in
the Disaster Tax Relief and Airport and Airway Extension Act for 2017 (Disaster Tax Relief
Act) 4 and the Bipartisan Budget Act.
The SC Act also includes a new South Carolina deduction for dependents, a special deduction for
dependents under age six, income tax bracket adjustments, and other modifications to the federal
income tax laws. 5

1

SC Act No. 266
Public Law 115-97
3
Public Law 115-123
4
Public Law 115-63
5
This Information Letter does not include a complete discussion of South Carolina income tax changes and does not
discuss any new South Carolina income tax credits. For a summary of the SC Act, see the Department’s publication
“Tax Legislative Update for 2018” available on the Department’s website at www.dor.sc.gov under Tax
Professionals, Law and Policy.
2

1

This Information Letter provides a summary of South Carolina conformity with Internal Revenue
Code (IRC) sections affecting individual taxpayers. A chart of the individual tax provisions in
the TCJA and whether or not South Carolina adopts the IRC section is attached. 6 This summary
is written in general terms and does not contain all of the specific requirements or details of the
code sections. It should not be relied on as a substitute for researching original sources of
authority.

MAJOR FEDERAL TAX LEGISLATION
Tax Cuts and Jobs Act of 2017
TCJA is the most comprehensive federal tax reform in over 30 years. This law made major
changes to the taxation of individuals. Although some of the changes are permanent, most are
effective for tax years beginning in 2018 through 2025. 7 For individuals, TCJA provides lower
income tax rates and new tax brackets, increases the standard deduction, suspends personal
exemptions, limits the state and local tax deduction, temporarily reduces the medical expense
threshold, and eliminates miscellaneous itemized deductions, as well as many other changes.
IRC Sections Extended in the Bipartisan Budget Act of 2018
The Bipartisan Budget Act extended a number of IRC sections that are adopted by South
Carolina through December 31, 2017. 8 Those extensions include:

1. Provide an income exclusion for qualified principal residence indebtedness discharged
   before January 1, 2018 or subject to an arrangement that is entered into and evidenced in
   writing before January 1, 2018 (IRC §108(a)(E));
2. Allow mortgage insurance premiums to be treated as qualified residence interest that is
   deductible for premiums paid or accrued before January 1, 2018 or subject to an
   arrangement entered into and evidenced by writing before January 1, 2018 (IRC
   §163(h)(3)(E)(iv); and
3. Allow a deduction for qualified tuitions and related expenses for tax years beginning
   before December 31, 2017 (IRC §222(e)).
   Disaster Relief Provisions in TCJA, Disaster Tax Relief Act, and Bipartisan Budget Act
   The TCJA, Disaster Tax Relief Act, and Bipartisan Budget Act each provide disaster tax relief
   for taxpayers.

6

The chart does not include corporate or other business tax changes that may affect individual taxpayers such as
changes involving expensing, depreciation, and business deductions.
7
The language in the IRC reads for tax years beginning after January 31, 2017 and before January 1, 2026. For
simplicity this document refers to tax years beginning in 2018 through 2025.
8
At the time of issuance of this document, Congress had not extended these provisions through 2018; however, the
Tax Extender and Disaster Relief Act of 2019 was introduced in the U.S. Senate in March of 2019. If enacted, this
bill would extend these, as well as other provisions, through 2019. At the time of the publication of this Information
Letter, proposed legislation in S.C. House Bill 3985 provides that if Congress extends these federal provisions for
2018, South Carolina will extend them in the same manner.

2

The TCJA provides tax relief for major disaster areas declared by the President during 2016,
including some parts of South Carolina as a result of Hurricane Matthew. The TCJA allows
special tax treatment for the deduction of personal casualty losses and hardship withdrawals from
qualified retirement plans associated with the declared disaster areas including those in South
Carolina.
The Disaster Tax Relief Act applies to Hurricanes Harvey, Irma, and Maria in areas declared a
major disaster by the President before September 21, 2017. The Disaster Tax Relief Act provides
much of the same tax relief as the TCJA for calculating personal casualty losses and hardship
withdrawals from qualified retirement plans. As of September 21, 2017, no area in South
Carolina had been declared a major disaster area, but the Bipartisan Budget Act expanded the tax
relief in the Disaster Relief Act to parts of South Carolina affected by Hurricane Irma.
Finally, the Internal Revenue Service issued a proposed rule on November 14, 2018, with
proposed amendments to regulations dealing with hardship distributions from qualified
retirement plans for victims of Hurricanes Michael and Florence similar to those provided under
the TCJA, Disaster Tax Relief Act, and Bipartisan Budget Act. South Carolina taxpayers can
follow this proposed rule to the extent allowed for federal income tax purposes as it applies to
IRC sections adopted by South Carolina. 9
Many of the provisions in these Acts that deal with disaster relief are temporary amendments to
IRC sections that South Carolina adopts in Code §12-6-50. These temporary amendments are,
therefore, also adopted for South Carolina income tax purposes in the same manner they are
allowed for federal income tax purposes. 10
South Carolina does not adopt IRC §§72(m)(5)(B), 72(f), 72(o), 72(q), and 72(t) relating to
penalties on certain retirement plan distributions regardless of whether the funds are withdrawn
due to disaster relief or for any other purpose. The federal rules related to penalties for hardship
withdrawals vary and should be reviewed prior to obtaining a withdrawal, but South Carolina
will not impose penalties under the sections listed above.
The Internal Revenue Service has numerous resources on its website about disaster relief,
including information specific to each disaster which identifies counties within each state that
have been declared disaster areas entitled to tax relief. 11

9

See, IRS News Release IR-2018-236, November 29, 2018 (references IRS Announcement 2017-15 which provides
information on Hurricane Florence); “Hardship Distribution of Elective Contributions, Qualified Matching
Contributions, Qualified Non-elective Contributions, and Earnings” (Proposed rule by the IRS on November 14,
2018). Additionally, The Tax Extender and Disaster Relief Act of 2019 was introduced in the U.S. Senate in March
of 2019 that would extend these disaster relief provisions for major disasters occurring in 2018. At the time of the
publication of this Information Letter, proposed legislation in S.C. House Bill 3985 provides that if Congress
extends these federal provisions for 2018, South Carolina will extend them in the same manner.
10
Some of these provisions require amendments to retirement plan documents. To the extent plan amendments are
required for federal income tax purposes, they are also required for South Carolina income tax purposes under the
same terms.
11
IRS website is www.irs.gov. Disaster relief information is under the “news” section. The website provides
information for victims of various disasters under “Tax Relief in Disaster Situations.” See also, IRS Publication 976
“Disaster Relief for 2017”.

3

SOUTH CAROLINA FEDERAL INCOME TAX CONFORMITY
IN 2018
Introduction
South Carolina’s adoption of the IRC is not automatic and is not all inclusive. The October 3,
2018 SC Act amends Code §12-6-40(A)(1)(a) to update South Carolina’s income tax laws to
conform to the IRC as amended through February 9, 2018 and includes the effective date
provisions contained therein.
Code Section 12-6-50 was amended to add the following provisions to the list of IRC sections
specifically not adopted by South Carolina.

1. IRC §118(b)(2) relating to the tax treatment of contributions by government entities or
   civic groups;
2. IRC §162(r) relating to the deduction of FDIC premiums;
3. IRC §163(j) relating to limitation on business interest expense and IRC §§381(c)(20) and
   382(d)(3) relating to the carryover of limited business interest in IRC §163(j)(2);
4. IRC §199A relating to the qualified business income deduction; and
5. IRC §§250 and 267A relating to the taxation of foreign income.
   Other South Carolina Income Tax Law Changes in 2018
   In addition to IRC conformity discussed above, other changes to South Carolina individual
   income tax in 2018 include:
6. A new South Carolina dependent exemption equal to $4,110 for tax year 2018 (indexed
   for inflation in future years) for each eligible dependent of the taxpayer, including both
   qualifying children and qualifying relatives. Dependents must meet the eligibility
   requirements of IRC §§151 and 152 for a qualifying child or relative, as those sections
   applied on January 1, 2017. Code §12-6-1140(13).
7. A deduction for dependents under the age of 6 equal to the dependent exemption amount
   of $4,110 for tax year 2018 (indexed for inflation in future years). Code §12-6-1160.
8. Income tax brackets inflation adjustment using the chained consumer price index for all
   consumers (adjustment may not exceed 4% a year). Code §12-6-520.
   For other tax provisions affecting individuals that are not part of IRC conformity, including
   temporary provisos and tax credits see “South Carolina Tax Legislative Update for 2018”
   published by the Department. 12

12

See footnote #5.

4

INDIVIDUAL INCOME TAX
TAX CUT AND JOBS ACT OF 2017 AND
SOUTH CAROLINA INCOME TAX CONFORMITY
AS OF FEBRUARY 8, 2018
Unless otherwise indicated, these code sections are effective for tax years beginning in 2018 through
2025. 13 This chart is written in general terms and does not contain all of the specific requirements or
details of the code sections. It should not be relied on as a substitute for researching original sources of
authority.
IRC Code Section
IRC §1(j)

Description
Tax rates for
individuals

New Federal Law
Lowered the federal tax rates
to 15% - 39.6%.

SC Treatment
SC does not adopt federal
tax rates. SC Code §12-650(1).
SC Code §12-6-510
provides SC tax rates of
3% - 7% and §12-6-545
provides a 3% tax rate on
pass-through active trade
or business income.

IRC §24

Child tax credit

Increases child care tax credit.

SC does not adopt IRC
§24. SC Code §12-650(2).

IRC §55

Individual alternative
minimum tax

Changes the alternative
minimum tax exemption
amounts and increases the
phase-out exemption amounts.

SC does not adopt IRC
§55. SC does not have an
alternative minimum tax.
SC Code §12-6-50(3).

IRC §63(c)(7)

Standard deduction

Increases the standard
deduction.
The 2018 amounts are:
Single - $12,000
Head of Household - $18,000
Married filing jointly or
Qualifying widow(er) $24,000

SC adopts IRC §63.

Additional standard deduction
for individuals over 65 or
blind allowed based on prior
law. The 2018 amounts are:
$1,600 for single and $1,300
for married or surviving
spouse (for each qualification).
13

CAUTION: Because these items are suspended, but not repealed, the full code sections, including parts
that are suspended, remain in the IRC. When reviewing the IRC provisions that are suspended, the
language of the original code section remains and the suspension language is generally in the last
paragraph of the code section.
5

IRC Code Section
IRC §67(g)

Description
Miscellaneous
itemized deductions
subject to 2% floor

New Federal Law
Suspends all miscellaneous
itemized deductions subject to
the 2% floor. Examples of
miscellaneous itemized
Note: The $250
deductions include
exclusion from gross
professional dues, job-hunting
income for certain
expenses, uniforms and
teacher expenses is not special clothing for job, and
a miscellaneous
expenses paid for production
itemized deduction and of income, such as investment
is deductible in
expenses.
calculating adjusted
gross income . IRC
§62(a)(2).

IRC §68(f)

Overall limitation on
itemized deductions

SC Treatment
SC adopts IRC §67.

Suspends the federal limitation SC does not adopt IRC
on itemized deductions.
§68.
SC did not limit itemized
deductions under IRC
§68 under prior law. SC
Code §12-6-50(17).

IRC §71 - repealed
(Note: IRC §71 will
continue to apply to
divorce decrees and
separation
agreements
executed before
12/31/2018.)

Alimony and separate
maintenance payments
included in recipient’s
gross income
Permanent provision

See also, IRC §215
below for alimony
and separate
maintenance
payment deduction
for payer.

IRC §71 was repealed with
respect to divorce or
separation instruments
executed after 12/31/2018. For
instruments executed after
12/31/2018 alimony and
separate maintenance
payments are not included in
recipient’s gross income.

SC adopts IRC §71.

See disaster relief
discussion in text above.

IRC §§72, 165, and
various deferred
compensation
provisions from IRC
§§401 through 414.

Relief for 2016
disaster areas

See disaster relief discussion
in text above.

IRC §83(i)

Qualified equity grants

Allows employees of certain
SC adopts IRC §83.
start-up companies to make a
special election with respect to
qualified stock transferred to
them so that no amount is
included in income for the first
taxable year until the earlier of
five years or certain other
events.

Permanent provision

6

IRC Code Section
IRC §108(f)(5)

Description
Discharge of student
loan indebtedness

New Federal Law
For 2018 through 2025,
student loan debt discharged
on account of death or total
and permanent disability of
student is excluded from gross
income.

SC Treatment
SC adopts IRC §108.

Treatment of certain
individuals performing
services in Sinai
Peninsula of Egypt

Grants combat zone tax
benefits to Sinai Peninsula of
Egypt.

SC adopts IRC §112.

Income exclusion for
qualified moving
expense
reimbursements

Suspends the exclusion from
gross income for qualified
moving expense
reimbursements under IRC
§132(a)(6). The exclusion is
still available for active duty
members of military who
move pursuant to a military
order and incident to a
permanent change of station.

SC adopts IRC §132.

IRC §§132(f)(8),
274(a)(4)

Qualified
transportation fringe
benefits – qualified
bicycle commuting
reimbursement

Suspends exclusion from gross SC adopts IRC §§132
income for any qualified
and 274.
bicycle commuting
reimbursement and disallows
the expense deduction for any
such reimbursement.

IRC §151(c) and
(d)(5)

Personal exemptions

Suspends federal personal
exemptions for the taxpayer,
spouse, and dependents.

.

IRC §112

IRC §132(a)(6) and
(g)(2)
See also, IRC §217
below.

IRC§152-dependent
defined

See also, SC Rev. Proc.

08-3.

SC adopts IRC §§151
and 152.
There is no South
Carolina personal
exemption for taxpayer
or taxpayer’s spouse.
SC Code §§12-6-1140
and 12-6-1160 provide:
 A SC exemption of
$4,110 for each
eligible dependent
(both children and
qualifying relatives)
that meet the eligibility
requirements of IRC
§§151 and 152 as those
sections applied on
January 1, 2107.

Continued

7

IRC Code Section
Continued

Description
Personal exemptions

IRC §151(c) and
(d)(5)

New Federal Law
Suspends federal personal
exemptions for the taxpayer,
spouse, and dependents.

IRC§152-dependent
defined

SC Treatment
 An additional SC
deduction equal to the
dependent exemption
amount for children
who have not reached
age six during the tax
year.
 The SC exemptions
will be indexed for
inflation using the
Chained Consumer
Price Index beginning
in 2019.

IRC §162(a)

Living expenses for
members of Congress
Permanent provision

IRC §163(h)(3)(F)

Mortgage interest
deduction

Eliminates the $3,000
deduction of living expenses
for members of Congress for
tax years beginning after
12/22/2017.

SC adopts IRC §162.

For 2018 through 2025, the
mortgage interest deduction is
limited to interest on $750,000
($375,000 for married filing
separately) for debt incurred
after 12/15/17. (Prior to the
change the interest deduction
was limited to interest on $1
million.) Interest can be from
principal residence and one
other residence.

SC adopts IRC §163.

After 2025, the limitation
returns to $1 million
($500,000 for married filing
separately) regardless of when
the debt was incurred.
Suspends mortgage interest
deduction for home equity
indebtedness with certain
exceptions for refinanced
indebtedness.

8

IRC Code Section
IRC §164(b)(6)

Description
State and local tax
deduction

New Federal Law
For 2018 through 2025,
individuals can only deduct
state and local sales, personal
income taxes, or property
taxes up to $10,000.

SC Treatment
SC adopts §164 except
SC does not allow
individuals to deduct
state and local income
taxes (or state and local
sales and use taxes
deducted instead of state
and local income taxes if
the taxpayer made the
election under IRC
§164). These taxes may
be added back in
calculating SC taxable
income. SC Code §12-61130(2).
Note: There is no SC
ordering rules for tax
deductions. As a result, if
the taxpayer deducted
$10,000 of state income
taxes for federal
purposes and was,
therefore, not able to
deduct property taxes for
federal purposes, the
taxpayer could add back
the state income taxes
deducted for federal
purposes and deduct their
property taxes up to
$10,000. SC Rev. Rul.

19-1.

IRC §165(d)

Limitation on
wagering losses

Suspends certain deductions
available to professional
gamblers such as
transportation, lodging, and
admission fees except to the
extent of gambling winnings.

SC adopts IRC §165.

IRC §165(h)(5)

Personal casualty
losses

Suspends personal casualty
losses except those losses
incurred as a result of
federally-declared disasters as
determined by the President to
warrant federal assistance
under the Robert T. Stafford
Disaster Relief and
Emergency Assistance Act.

SC adopts IRC §165.

9

IRC Code Section
IRC §170

Description
Charitable contribution
deductions

New Federal Law

IRC §170(b)(1)(G)

Temporary provision

For 2018 through 2025, AGI
limitation on cash
contributions increases from
50% of AGI to 60% of AGI
for contributions.

IRC §170(l)(1)

Permanent provision

Repeals the deduction for 80%
of contributions related to
university athletic seating
rights.

IRC §170(f)(8)(D)
Repealed

Permanent provision

Repeals provision that allowed
IRS to issue regulations that
provided taxpayers did not
need to substantiate
contributions of less than $250
if the donee organization filed
a return providing information
required by the substantiation
rules.

Pass-through tax
treatment – 20%
deduction for qualified
business income

For 2018 through 2025, a
special deduction is allowed to
taxpayers for “qualified
business income” from passthrough entities.

SC does not adopt IRC
§199A. SC Code §12-650(19).

Suspends deduction for
expenses for production of
income under IRC §212.
These expenses are
miscellaneous itemized
deductions subject to 2% of
AGI that are not deductible for
tax years 2018 through 2025.

SC adopts §§212, 67,
and 162.

Note: Due to IRC
renumbering, there is
a new IRC
§170(f)(8)(D) which
is different from the
repealed provision.
IRC §199A

IRC §212

Expenses for
production of income,
including tax
preparation fees
Note: Tax preparation
fees associated with a
trade or business are
still deductible under
IRC §162.

See, Regulation §1.67-1T for
regulation on 2% floor for
miscellaneous itemized
deductions.

10

SC Treatment
SC adopts IRC §170.

SC Code §12-6-545
provides a 3% tax rate on
pass-through active trade
or business income. See,
SC Rev. Rul. #08-2.

IRC Code Section
IRC §213(f)

Description
Medical expense
deduction

New Federal Law
SC Treatment
For 2013 through 2016,
SC adopts IRC §213.
taxpayers age 65 and older
could deduct medical expenses
in excess of 7.5% of AGI.
For 2017 through 2018, any
age taxpayer could deduct
medical expenses in excess of
7.5% of AGI.

Permanent provision
after 2018

After 2018, any age taxpayer
can deduct medical expenses
in excess of 10% of AGI.

Note: Federal
Legislation was
introduced in the US
Senate in March of
2019 to extend the
7.5% limitation
through 2019.
IRC §215 - repealed
Note: IRC §215 will
continue to apply to
divorce decrees and
separation
agreements executed
before 12/31/2018.

Alimony payment
deduction
Permanent provision

See also, IRC §132
above

SC adopts IRC §215.

For divorce decrees or
separation agreements
executed before 12/31/2018
but modified after that date,
alimony received would not be
included in income and
alimony paid would not be
deductible if the modification
expressly provides that the
amendments to this section
apply to the modification.

See also, IRC §71
above for inclusion
in income by
recipients of alimony
and separate
maintenance
payments.

IRC §217(k)

For divorce decrees and
separation agreements
executed after 12/31/2018,
alimony paid is not deducted
from income.

Moving expenses
deduction

Suspends the deduction for
moving expenses (except for
active duty military that move
pursuant to military order or
permanent change of station
under IRC §217(g)).

11

SC adopts IRC §217.

IRC Code Section
IRC §274(j)(3)(A)(ii)

Description
Employee
achievement awards
Permanent provision

IRC §402(c)(3)(C)

Rollovers of plan loan
offsets
Permanent provision

IRC §408A(d)(6)
(B)(iii)

Roth IRAs
Permanent provision

IRC §457(e)(11)(B)

Length of service
awards for public
safety volunteers
Permanent provision

New Federal Law
For amounts paid or incurred
after 12/31/2017, certain
employee achievement awards
are not defined as tangible
personal property and are
included in income, e.g. cash,
cash equivalents, gift
certificates, vacations, meals,
lodging, tickets to the theater
or sporting events, stocks,
bonds, and similar items.

SC Treatment
SC adopts IRC §274.

Allows an employee with a
loan from an employer
sponsored retirement plan
until the due date for filing the
employee’s tax return for that
year (including extensions) to
contribute the loan balance to
an IRA to avoid having the
loan amount treated as a
taxable distribution. Applies to
employees whose plans
terminated or who leave
employment while having a
plan loan outstanding.

SC adopts IRC §402.

Eliminates the rule that
SC adopts IRC §408A.
allowed a traditional IRA to be
converted to a Roth IRA and
then allowed the taxpayer to
recharacterize the Roth
conversion contribution as a
contribution to a traditional
IRA until Oct. 15 of the
following year.
Special rules for a deferred
compensation plan paying
solely length of service awards
to bona fide volunteers (or
their beneficiaries) on account
of qualified services
performed by the volunteers.
The aggregate amount of
service awards increases from
$3,000 to $6,000 (adjusted for
inflation).

12

SC adopts IRC §457.

IRC Code Section
IRC §529(c)(7)

Description
Expands use of 529
Plans
Permanent provision

New Federal Law
Expands 529 plans to allow
$10,000 per year for tuition
per designated beneficiary
(regardless of the number of
plans involved) in connection
with enrollment in an
elementary or secondary
public, private or religious
schools. IRS guidance
provides that elementary
school includes kindergarten.
(IRS Notice 2018-58).

SC Treatment
SC adopts IRC §529.

IRC §529(c)(3)
(C)(i)(III)

Rollovers from 529
plans to qualified
529A plans (ABLE
Plans)

Allows a tax free rollover
from a 529 plan to a qualified
529A plan (ABLE Plan)
before January 1, 2026.

SC adopts IRC §529.

IRC §529A

Contributions to
ABLE accounts

Allows additional
contributions to ABLE
accounts from the account’s
designated beneficiary up to
the lesser of (a) the
beneficiary’s compensation
for the tax year or (b) the
federal poverty line for a oneperson household. (Prior law
only allowed a contribution
from all contributors,
including the beneficiary, up
to the amount of the annual
gift tax exclusion which was
$15,000 in 2018.)

SC adopts IRC §529A.

Extends certain time
limitations associated with
IRS levies.

SC does not adopt IRC
§6343. SC Code §12-650(16).

Permanent provision

IRC §6343

IRS levies
Permanent provision

See also SC Code §12-61140(12).

SC levy provisions can
be found in Chapter 54
of Title 12.

13