SC Department of Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Major Changes To DOR Forms for 2002

 

Major Changes To DOR
Forms for 2002
 
Individual Income Tax and Partnership Form Changes
 
SC1040 Long Form
SC College Investment Program
Contributions to the SC College Investment ("Future Scholar") Program are fully
deductible on line 55
 
30% Bonus Depreciation
If you take 30% bonus depreciation for federal purposes for property placed in service in 2002, add back on line 38 the difference between the federal depreciation deduction and the depreciation deduction allowed under prior federal law.
 
If you took 30% bonus depreciation for federal purposes for property placed in service in
2001, the South Carolina adjusted basis will be higher than your federal adjusted basis. Deduct on line 55 the resulting difference between state and federal depreciation deductions.
 
Educator Expenses
If you take the federal deduction of up to $250 for educator expenses, you need to add back the entire amount on line 38.

Schedule NR Nonresident Schedule
SC College Investment Program
Contributions to the SC College Investment ("Future Scholar") Program are fully
deductible on line 35.
 
30% Bonus Depreciation
If you take 30% bonus depreciation for federal purposes for property placed in service in 2002, add back on line 15, Column B the difference between the federal depreciation deduction and the depreciation deduction allowed under prior federal law.  Do not make any adjustment to column A.
 
If you took 30% bonus depreciation for federal purposes for property placed in service in 2001, the South Carolina adjusted basis will be higher than your federal adjusted basis. Deduct on line 35 the resulting difference between state and federal depreciation deductions.
 
Tuition and Fees Deduction
Include the new federal tuition and fees deduction on line 19.

Worksheet W Two Wage Earner Credit Worksheet
Worksheet W is eliminated.  Two wage earner credit worksheets are provided in the instructions to SC1040A, line 6 and SC1040, line 7.

I-319 Tuition Tax Credit
I-319 is redesigned to include additional important information.

SC1065 Partnership Return
SC1065 is reorganized to provide for allocation and apportionment in the proper order.
 
 
 
Corporate Income Tax Form Changes

# 1 CORPORATE BOOKLETS AND POSTCARDS
Postcards are being sent to corporate accounts. Booklets will not be mailed in an effort to save the cost of printing and mailing a tax booklet.  Many corporate returns are filed using software programs and the paper copies of the booklets are never used. Taxpayers who need a paper copy
of the 2002 corporate forms and instructions can return the corporate postcard to the SC Department of Revenue to request forms and instructions or go to our website.
 
# 2 FILING FOR EXTENSION OF TIME TO FILE A CORPORATE RETURN
SC will recognize either a timely filed Federal or SC corporate extension for both C and S corporations. When a taxpayer is not required to make a payment of tax at the time of the extension, and the taxpayer has been granted an extension of time to file a federal income tax return, the taxpayer is not required to apply to the department for an extension of time to file the South Carolina return. The department shall accept a copy, if applicable, of a properly filed federal extension attached to the South Carolina return when filed.

# 3 FEDERAL BONUS DEPRECIATION SIGNED IN MARCH 2002
South Carolina did not adopt the bonus federal depreciation signed into law by the President in March 2002.  If a taxpayer includes the 30% additional depreciation allowance in the calculation of the taxpayer's federal taxable income, the 30% depreciation allowance must be added back to federal taxable income when calculating South Carolina taxable income.  (See "What's New" and Page 8, C Corporation Instructions for additional information).
 
# 4 SCHEDULE D ANNUAL REPORT TO BE COMPLETED BY ALL
 CORPORATIONS (FOUND ON FORMS 1120, 1120S, 1120U)
All items which presently can be disclosed, (Lines #1, 3, 5, 8, 12, 13, 15 on 9/6/01 revision of SC1120 and SC1120S and other related annual reports), have been re-numbered so all DISCLOSURE items are together. These seven items will be lines 1 to 7 on the revised annual report. This will make it easier for those preparing copies of forms being provided to taxpayers who request information on certain corporations.
 
Other changes were also made including Line 11, "If a professional corporation, are one-half .... of their officers qualified to practice ... .", has been DELETED.
 
# 5 FORM SC1120-TC CHANGES And SCHEDULE C ON VARIOUS FORMS
 -  TC-20 has been added to SC1120-TC, Part I, for Brownfields Projects.
 
 -  SC1120-TC form is now set up as Part I and Part II with instructions for each part.
 
 - Schedule C on SC1120, SC1120S, SC1120U, and 990-T has been updated to agree to the SC1120-TC changes.
 
# 6 FORMS 1120, 1120S, SC1120-TC CHANGES
A space for bar codes has been added which has shifted information requested from taxpayers to different parts of the form.

# 7 WHAT'S NEW?
There are two pages of  "What's New".

# 8 REVISION FOR 2002 CORPORATE INSTRUCTIONS FOR S CORPORATIONS 
 
Procedures For Qualified Subchapter S Subsidiaries
Instructions now found on page 12 for filing returns for QSSS subsidiaries have been changed to:
For income tax purposes, South Carolina treats the assets, liabilities, income, and deductions of a qualified subchapter S subsidiary (QSSS) as it is treated for federal income tax purposes.
 
Additionally, a QSSS is treated as a disregarded entity for South Carolina license fee and annual report purposes.
 
# 9 CORPORATE INSTRUCTIONS
The instructions have been re-named because booklets will not be mailed. Some instructions in the booklet have been moved around (other than SC1120 General Instructions,  SC1120 C and SC1120 S Corporations Instructions remain in basically the same place).
 
# 10 THE FAMILY PRIVACY PROTECTION ACT
The statement prepared by DOR to be placed on the 2002 instructions has been added at the bottom of page 7 of the corporate instructions.
 
 
 
Sales and Use Tax Form Changes
 
1. Information pertaining to retailers who timely file and pay their taxes electronically and the maximum discount of $3100 was included in the sales tax booklet.
 
2. Taxpayers who file their tax returns and pay their tax electronically were notified by letter of this change in the law. This letter basically informed the taxpayer that a sales tax booklet will not be mailed since the return and payment was handled electronically. In the event a booklet was needed, a copy of the booklet was available on our website or by contacting DOR.
 
3. The sales tax booklet was further revised to include information about the other legislative changes under the NEW INFORMATION page of the booklet. Information included in the booklet consisted of: (1) the reduction in the threshold requirement from 20,000.00 to 15,000.00 (2) Increase in maximum discount for electronically remitting return with payment (3) Prepaid Wireless Calling Arrangements (5) Private School Use Tax Exemption. (6) Responsible party liability for payment and (7) Sales and Use Tax Regulations - Reorganized
 
4. The Sales Tax booklet was placed on the DOR website under the subject "What's New".
 
5. Additional clip art was used to reference services provided by DOR, like electronic filing, and business tax telefile.
 
6. An article on business personal property tax was added to the booklet.
 
7. A copy of the ST-8-A form - Resale Certificate was added to sales tax booklet this year.
 
8. Added a "warrant costs" blank for office use only to the ST-3, ST-388, ST-403 and ST-389 forms.
 
9. The form ST-389 was changed to create more lines for new and existing local taxes.  Changes to the form consisted of using vertical lines to divide columns and to define particular tax area on the form.
 

10. The Local Tax section on the face of the form ST-3 was revised to indicate that the local tax section should be completed if any one of the following conditions applied;
    - Your business is located in a county that imposes a local tax, or
    - Your business delivers to a county with local tax.

11. The Form ST-389 was revised to include the local tax "Property Offset Tax. This tax is not currently being collected. Bold lined were used to define columns and tax types on the form. Columns on the form were renamed to clarify that the local taxes were required to identify more
than the name of the county.  As a result of the local option tax section needing more space, the ST-389-A form (LOCAL OPTION ADDENDUM) was created and added to the booklet.
 
12. Due to the creation of the Family Privacy Protection Act, certain forms and instructions were revised to include a Family Privacy Protection Statement.
 
13. Other changes to the sales and use tax forms and instructions for 2002 centered around grammatical and cosmetic changes.
 
 


 
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