5 of the best tips to help SC families save money filing their taxes in 2023

With prices up for everything from groceries to gas, South Carolina families on a budget could use some help and tax season might offer that relief.

The IRS and the South Carolina Department of Revenue began accepting 2022 tax returns last week. The 2023 tax season deadline is set for April 18. Tax return and refund processing is expected to take six to eight weeks from Feb. 6 or the date a tax return is filed.

According to SCDOR, more than 1 million state individual income tax returns claimed state tax breaks available for South Carolina families last year.

Here are five ways South Carolina families may be able to claim deductions and credits on their state tax returns this year, according to the SCDOR.

SC earned income tax credit

South Carolina’s earned income tax credit increased for 2022 to 104.17% of the federal earned income tax credit. SCDOR recommends you claim the EITC on your federal income tax return. This credit is open to full-year South Carolina residents and helps low- to moderate-income working individuals or couples, particularly those who have children.

According to the IRS, almost 25% of eligible taxpayers don’t claim the EITC. More than 149,000 returns claimed more than $140 million in South Carolina earned income tax credits last year.

However, if you are not eligible for the federal credit, you cannot claim the state credit. To check your eligibility, click here.

Child and dependent care credit

More than 128,000 returns claimed over $27 million in child and dependent care credits last year, the SCDOR states.

This credit is calculated at 7% of the federal child and dependent care expense for full-year South Carolina residents. The maximum credit allowed is $210 for one child or $420 for two or more children. The federal credit offers a maximum of $2,100 this year instead of the $8,000 offered last year.

Taxpayers cannot claim this credit if they are using a married filing separately status on their returns.

Child deductions

Dependent exemptions in South Carolina have been increased to $4,430 from $4,300 for each eligible dependent, including qualifying children and relatives.

More than 718,000 returns claimed independent deductions last year, including more than 240,000 returns for children under 6 years old.

Two wage earner credit

Married couples filing jointly when both spouses have earned income taxed to South Carolina can claim this credit.

The credit is 0.7% of the lesser of $46,667 or the South Carolina qualified earned income of the taxpayer with the lower qualified income for the taxable year, the SCDOR states.

More than $71 million in this credit was claimed by 383,000 returns last year.

Future college payment deductions

South Carolina College Investment Program, referred to as Future Scholar or to the SC Tuition Prepayment Program) contributions are deductible. Taxpayers can deduct 100% of any contributions made between Jan. 1, 2022 and April 18, 2023 to the College Investment Program. Taxpayers can also deduct 100% of any contributions made between Jan. 1, 2022 and Dec. 31, 2022 to the Tuition Repayment Program.

According to the SCDOR, more than 33,000 returns claimed $389 million in future college payment deductions last year.