Employers paying wages at the rate of $1,000 or more a year must withhold income tax for that employee. However, certain remunerations are not considered wages as identified in Code Section 12-8-520 (D). These remunerations are not subject to withholding. Employers paying these remunerations may withhold upon request by their employees, but are not required to withhold. The South Carolina Department of Revenue will waive the quarterly withholding filing requirement and permit the employer to file the annual withholding return in cases when withholding is voluntary.
Performed Services That Are Eligible For Annual Filing
The remunerations for performing the services listed below are not considered wages and are not subject to South Carolina withholding. Employees performing these types of services may request that their employers voluntarily withhold income taxes from their paid remuneration.
(1) Agricultural services performed by an employee on a farm in connection with
(a) cultivating soil, or raising or harvesting any agricultural or horticultural commodity,
(b) operating, managing, conserving, improving or maintaining a farm and its tools and equipment,
(c) Salvaging timber or clearing land or debris left by a hurricane if performed on a farm.
(2) Domestic services performed in a private residence.
(3) Personal services performed on occasional, sporadic or casual visits to this State by nonresident employees. This category does not include employees performing construction, installation, engineering or similar services.
(4) Services performed by a duly ordained, commissioned or licensed minister of a church.
(5) Services performed by an individual on a boat with a crew of 10 or fewer engaged in catching fish or other forms of aquatic animal life under the arrangement that each crew is to receive a share of the boat's catch or a share of the proceeds.
(6) Services performed by a disabled person as defined by the Department of Disabilities and Special Needs, employed in a program approved by the Department of Disabilities and Special Needs whose projected income is $7,500 a year or less.
Registering, Filing Returns and Remitting Withholding Payments
Employers filing annual returns are required to register with the South Carolina Department of Revenue as annual withholding filers when registering for a withholding account or they can contact the Withholding Hunt-Line at (803) 896-1450 and request that their withholding filing frequency be revised from quarterly to annually. Annual filers are required to file the form WH-1606 by the last day of February of the following year. All withholding payments are to be remitted to the Department of Revenue during the fourth quarter of the calendar year. Employers who elect instead to remit withholding payments on a quarterly basis must file withholding returns on a quarterly basis.
Conformity with the IRS
The Internal Revenue Service has changed its employment tax filing requirement for certain businesses from quarterly to annually. South Carolina has not adopted this change.