South Carolina Withholding and Forms W-2 South Carolina Department of Revenue www.sctax.org

Code Section 12-18-1540 Agents shall furnish statements to taxpayers and department; contents. A person required to withhold income tax under this chapter, or who would have been required to withhold a tax under Section 12-8-520 if the taxpayer claimed a single exemption shall furnish on or before January 31st of the following year a properly completed federal wage and tax statement or federal 1099 to the taxpayer with respect to the remuneration paid during the calendar year,

EMPLOYEES

Incomes subject to withholding An employer paying wages to an employee shall withhold income tax for that employee if at the time of payment the wages are expected to equal one thousand dollars or more during the year

Wages not subject to SC withholding 1) Wages of a resident employee receiving wages in another state if: a) the wages are subject to the withholding laws of the state in which they are earned; and b) the employer is withholding income taxes on behalf of the other state. 2) Wages of an employee obtaining a waiver from withholding pursuant to Section 12‑8‑1040.

Wages not subject to SC withholding 3.) Wages of spouses who are eligible for the Military Spouses Residency Relief Act: PL 111-97 was signed into Federal law on November 11, 2009 Income of servicemember’s spouse is not taxable to the state where the services are performed. Prior to the Act, nonresident military spouse’s income for services performed in South Carolina would be taxed in South Carolina.

Military Spouses Residency Relief Act Requirements Servicemember is in South Carolina as a result of military order Servicemember and spouse have the same state of domicile South Carolina is not the state of domicile Spouse resides in the state solely in order to live with the servicemember

SC W-4 A service member’s nonresident spouse claiming an exemption from SC withholding tax Must be completed before January 1st SC Revenue Ruling #10-5

Filing WH-1605 WH-1605 Last day of the month following quarter end When the withholding account is closed File amended return

Filing WH-1606 WH-1606 Last day of February When the withholding account is closed File amended return

W-2’s and 1099’s How do you submit W-2s and/or 1099s to SC DOR Electronically via www.scbos.gov (W-2s only) CD-ROM Paper Forms

W-2’s and 1099’s Electronic Filing Not available for 1099 Series Forms Not available for W-2G, W-2C

Filing WH-1612 WH-1612 With CD-ROM With paper

Closing a withholding file number Methods Form C-278 WH-1605 or WH-1606 eWithholding TeleFile

Closing a withholding file number Items that are submitted to DOR Complete W-2’s and 1099 and WH-1612 if required Complete the last WH-1605 Complete WH-1606 Complete SC-8822

Code Section 12-8-2020 Refund of credit for overpayment (A) A refund or credit may be allowed for an overpayment of tax withheld pursuant to the chapter to: (1) the withholding agent to the extent that the withholding agent did not withhold the overpayment amount from the taxpayer; or (2) the taxpayer to the extent that the overpayment was withheld from the taxpayer.

Code Section 12-8-2020 Refund of credit for overpayment (B) A refund or credit may be granted to a withholding agent who has withheld taxes in error if the withholding agent has refunded or unconditionally credited the amount erroneously withheld to the taxpayer and the amount is refunded or credited to the taxpayer before the issuance of the original wage and tax statement for the calendar year.

Corrected W-2 Use W-2C to correct errors on Form W-2 Submit with amended WH-1605 and WH-1606 Can not reduce South Carolina State income tax

SC Withholding Reconcile withholding before issuing W-2 and 1099 Forms No inactive status – Withholding is either open or closed Always file a return if withholding account is open Close the withholding account if no payroll File all required quarterly return(s) when you close your business

Questions

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