South Carolina R&D Tax Credit Summary

 

The South Carolina R&D Tax Credit provides a tax credit for increasing qualifying research activities. South Carolina leverages off of Internal Revenue Code Section 41 regarding qualified expenditures but calculates the credit based solely on expenditures incurred in South Carolina.​​

SC R&D Credit (S.C. Code Section 12-6-3415) Summary:

  • 5% of the qualified research expenditures that occurred in South Carolina

    • Taxpayers who claim a tax credit on their federal income tax for increasing research activities under IRC §41 are allowed a credit against corporate income tax equal to 5% of qualified research expenses made in South Carolina

  • The R&D Tax Credit taken in any one taxable year cannot exceed 50% of a taxpayer's liability after all other credits have been applied

Eligible Entities: C-Corporation, S-Corporations, LLCs, Partnerships

Deadline for Tax Filing: Due with South Carolina Tax Return

  • For a taxpayer to qualify for the credit, the taxpayer must claim a federal income tax credit pursuant to Internal Revenue Code §41 for increasing research activities for the taxable year.

Data Required to Compute Credit: Claim Period South Carolina Qualified R&D Expenses (QREs)

Credit Carryforward: 10 Years

  • South Carolina allows a 10-year carry forward period for any unused R&D Tax Credit.

Refundable/Transferable Tax Credit: No

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