SOUTH CAROLINA DEPARTMENT OF REVENUE
COLLEGE TUITION TAX CREDIT
To help ease the financial burden for South Carolina college students and their families, the South Carolina General Assembly has created an income tax credit for tuition paid to South Carolina colleges and universities. Following is important information on South Carolina's College Tuition Tax Credit.
|Who can claim the credit?
The student, parents, guardian, or whomever actually pays the tuition and claims the student as a dependent on their tax return may claim the credit. If the parent and student split the cost of the tuition, they also may split the credit on the tax return. However, the combined credit claimed by the parent and student may not exceed the maximum amount of the credit. Parents or guardians with more than one student in college may claim a credit for each qualifying student.
Who qualifies for the credit?
- Students must have completed their high school education in May 1997or afterwards.
- Students must have graduated from a South Carolina high school or home school program in South Carolina. Students may also qualify if they graduated from an out-of-state prep school as long as the parent or guardian remained a South Carolina resident. The student must enroll in college within 12 months of their high school graduation.
- Students must qualify for in-state tuition.
- Students must complete at least 30 credit hours at the end of the tax year in which the credit is claimed.
- Students must be enrolled in an undergraduate degree program or at least a one-year undergraduate certificate or diploma program.
- Students cannot have been convicted or pled guilty or no contest to any felonies or alcohol or drug crimes in any state. (This does not apply if the criminal record has been expunged.)
- Students cannot be in default on any student loans.
- Students may not claim the credit if they are recipients of the LIFE
- Scholarship or the Palmetto Fellowship. If the student loses the scholarship, a tax credit may be claimed for the time remaining in the four-year credit period if the student otherwise qualifies.
- Students must be in good standing at the school.
How much is the credit?
You can claim a credit on your personal income tax return of 25% of the actual tuition paid to the college each taxable year. The maximum credit is $850 a year if you attend a four-year school and $350 a year if you attend a two-year school. (The credit allowed for tuition paid to private colleges, however, is based on the average tuition paid to public four-year South Carolina colleges.)
How long can I claim the credit?
The credit may be claimed for four consecutive years once the student enrolls in college. The student must enroll in college within one year of graduating from high school. If the student starts college and then sits out a year before returning to college, the credit may be claimed for the time remaining in the four-year credit period.
I have a GED. Can I claim the credit?
No. You must be a graduate of a South Carolina high school program.
Which colleges can I attend to claim the tuition tax credit?
Most colleges in South Carolina are acceptable under the terms of the tax credit legislation. A complete list of acceptable colleges is included at the end of this page.
Schools with the sole purpose of providing religious or theological training or conferring professional degrees do not qualify. Any student attending a school not listed here would not qualify for the credit.
If I attend a private college, am I eligible for the tax credit?
Yes. The tuition tax credit is available for tuition paid to most private colleges in South Carolina. Again, the credit is based on the average tuition paid to South Carolina's public four-year colleges, not including technical or research schools. The average tuition amount will be calculated annually by the Commission on Higher Education and will appear in the South Carolina income tax instruction booklet. Students attending private colleges
must use this figure to calculate their tax credit, even though the actual tuition paid may be substantially more.
Can I claim the credit for dorm room, books or meal plan costs?
No. The credit is available only for tuition and fees that must be paid for you to enroll in college. Room, board and other expenses, such as student activity and athletic event fees, are not eligible for the tax credit.
If I receive a LIFE Scholarship, can I claim the tax credit for the remainder of the tuition not covered by the scholarship?
No. The tuition tax credit is not available to students who receive the LIFE scholarship or to students who are recipients of the Palmetto Fellowship.
I once received the LIFE Scholarship but lost it when my grades dropped. Can I claim the tuition tax credit now?
Yes, if you meet all the requirements for the tuition tax credit, you can claim the credit on your tax return. You can claim the credit for the number of years left in the allowable four-year credit period. The credit cannot be claimed for more than five tax years.
I received another scholarship and a federal grant. Can I claim the tuition tax credit?
Yes, but only for any tuition you had to pay after deducting the amount received for your scholarship and grant. If you attend a private college, you must subtract the amount of any scholarships or grants you receive from the average tuition paid to public four-year colleges that are used to calculate the credit. Scholarships and grants must be deducted before calculating the credit, but student loans, work-study programs or education assistance programs are not deducted before calculating the credit. Grants, which do not reduce tuition costs and are not used to pay tuition, such as a grant for room and board, are not deducted from tuition before calculating the credit.
What must I do in college to remain eligible for the tuition tax credit?
You must complete 30 credit hours at the end of each tax year the credit is claimed, and you must remain in good standing with the college. The 30- hour credit requirement can be met by any combination of hours earned during the winter, spring, summer, or interim terms in the tax year you are claiming the credit.
What if I attend only one regular semester? Will I be eligible for the tuition tax credit?
Yes. If you are enrolled in either the fall or spring semester (but not both) in the current tax year, you must complete 15 credit hours in a semester to be eligible for the credit. Summer school credit hours do not count in meeting this15-hour semester requirement.
I attend a college, which is not on the traditional semester system. What are my course hour requirements?
Special rules may apply for Converse, Erskin, Furman, Johnson and Wales and Wofford, which are not on traditional semester systems. The Commission on Higher Education has determined that students attending Converse, Erskine, Furman and Wofford must earn 30 credit hours in the tax year and students at Johnson and Wales must earn 36 credit hours in the tax year to meet the equivalent hour requirements. The Commission on Higher Education also has determined that students attending only one regular semester at Converse, Johnson and Wales and Wofford must complete 12 hours, Erskine 13 hours and Furman eight hours in either the fall or spring semesters.
Questions concerning equivalent credit hours for any school not on a traditional semester system should be directed to the Commission on Higher Education Services at (803) 737-2260.
I have to prepay my tuition at least a month before the semester starts. When do I claim the tax credit?
The credit must be claimed for the tax year in which the tuition is paid. For example, you are enrolled in the Spring 2002 semester and paid your tuition in December 2001. You will claim a credit for the tuition on your 2001 tax return. But remember, the credit may not exceed $850 per year for four-year schools or $350 for two-year schools, even if you paid more during the year.
I don't owe South Carolina income taxes. Should I file an income tax return to claim the tax credit?
Absolutely. The credit is refundable. That means even if you don't owe any taxes, you will still receive a refund for the amount of your tax credit.
What information must I include with my tax return when I claim the tuition tax credit?
You must file a Form SC1040 to claim the credit. The short form, Form SC1040A, cannot be used to claim the credit. When preparing your South Carolina income tax return, you will need to complete Form I-319, which will be included with all state individual income tax booklets, and attach a copy of your federal income tax return. Form I-319 is a simple form on which you provide the name of the high school from which the student graduated and the graduation date; names of the colleges in which the student has enrolled and the dates of attendance; the amount of tuition paid; the amount of all scholarships and grants which reduced the tuition received by the student for year; the total course hours attended for each semester; and other basic identifying information, such as name and address.
If you are claiming the credit for more than one student enrolled in college, you must complete a Form I-319 for each student.
|Calculating the tax credit
Student: Joe College
College Attended: South Carolina Public College
Hours completed during tax year: 30 credit hours
Tuition paid: $3,500
Scholarships received: $1,000
25% of tuition paid:$500
Amount of credit: $500
Student: Ann Student
College attended: South Carolina Private College
(Traditional semester system)
Hours completed during tax year: 30 credit hours
Average tuition amount allowed:$3,996*
Total scholarships / Grants received: $2,000
25% of tuition paid: $499
Amount of credit:$499
* This amount is determined each year by the Commission on Higher Education
Qualifying Four-year Colleges
($850 Maximum Tax Credit)
Bob Jones University
Charleston Southern University
Coastal Carolina University
College of Charleston
Columbia International University
Francis Marion University
Johnson and Wales
Medical University of South Carolina
North Greenville College
South Carolina State University
Southern Wesleyan College
University of South Carolina
University of South Carolina at Aiken
University of South Carolina at Spartanburg
|Qualifying Two-year Colleges
($350 Maximum Tax Credit)
Aiken Technical College
Central Carolina Technical College
Chesterfield-Marlboro Technical College
Denmark Technical College
Florence Darlington Technical College
Greenville Technical College
Horry-Georgetown Technical College
Midlands Technical College
Orangeburg Calhoun Technical College
Piedmont Technical College
Spartanburg Methodist College
Spartanburg Technical College
Technical College of the Low Country
Tri-County Technical College
Trident Technical College
University of South Carolina at Beaufort
University of South Carolina at Lancaster
University of South Carolina at Salkehatchie
University of South Carolina at Sumter
University of South Carolina at Union
Williamsburg Technical College
York Technical College
For More Information
The Department of Revenue has prepared an Advisory Opinion to explain the tuition tax credit in detail. A copy can be downloaded at our website. Instructions and information on this credit is published in the South Carolina income tax booklet.
Information on South Carolina college tuition tax credits also may be available at your college financial office and information on federal tax credits is available at the IRS website www.irs.ustreas.gov.