Parental Refundable Tax Credits
Since the program became part of permanent law in 2018, the SCDOR has transitioned the Parental Refundable Credit reporting and administration process from a fiscal year to a calendar year.
Here’s what parents and legal guardians need to know about the 2020 Parental Refundable Credit application process:
- Exceptional SC grant awards received in 2020 will reduce the 2020 Parental Refundable Credit.
- An updated TC-57A application will be available this fall on our website at dor.sc.gov/exceptional-sc and will require the following information for completion:
- Student name
- Household information (for reporting purposes only as required by statute)
- School name
- Tuition charged for 2020 spring semester and 2020 fall semester
- Exceptional SC scholarship amounts (if applicable) for 2020 spring semester and 2020 fall semester
- Total tuition amount paid by applicant to qualifying school in 2020
- Note: 2020 spring grants will not affect 2019 approved credit amounts or your 2019 South Carolina Individual Income Tax return.
Why are 2020 spring semester scholarships not included with 2019 Parental Refundable Credit calculations?
The SCDOR has worked to transition from a fiscal year to a calendar year process since the ECENC program moved from proviso to permanent law in 2018.
Does this change impact my 2019 Parental Refundable Credit amount?
No; only Exceptional SC grant awards received during 2019 were included in approving 2019 Parental Refundable Credit applications. 2020 scholarships from Exceptional SC will be included in 2020 credit application approvals.
If you have questions, please contact us at [email protected].
Tax Credits for Tuition
Taxpayers are entitled to a first come, first served Parental Refundable Tax Credit toward their South Carolina income tax bill for the amount of tuition paid to an eligible school for an eligible exceptional needs child, within his custody or care, to attend a school approved for program participation by the Education Oversight Committee. Parental Refundable Tax Credits can only be claimed for actual out-of-pocket spending on tuition, up to $11,000. Taxpayers can use this tax credit to reduce their South Carolina income tax liability below zero, allowing them to receive a tax refund. The cap for this tax credit is $2,000,000.
- Parents or guardians make their payment to an eligible school for an exceptional needs student’s tuition.
- Parents complete and submit Form TC-57A to the South Carolina Department of Revenue to request the parental refundable credit. The tax credit application cannot exceed the amount paid out of pocket for the student’s tuition, up to $11,000. Exceptional SC scholarships are not considered an out of pocket payment and cannot be claimed for this credit. Please save documentation for your own records including the exceptional needs child’s proof of eligibility.
- The SCDOR will tentatively approve the parental refundable credit requests on a first come, first-served basis according to the applicants’ representations as long as the $2 million cap has not been met.
- When the family files South Carolina income taxes, the tentatively approved parental refundable credit amount is used to complete the I-361 form.
Adjustments Based on Exceptional SC Awards
- The law that runs this program states that the combined dollar amount of a Parental Refundable Tax Credit and ECENC grant cannot exceed $11,000 or the cost of tuition, whichever is lower. If your tentatively approved credit needs to be adjusted due to an Exceptional SC award, you will receive an updated approval letter from the SCDOR.
- This adjustment allows the SCDOR to free up more tax credits for families still waiting for assistance.
- If you already filed your return and need to amend it, contact the SCDOR tax credit area for assistance at 803-898-5706.
- If you have not filed your return, claim the approved Parental Tax Credit amount stated on your most recent letter from the SCDOR using the form I-361.
Please contact the SCDOR for questions concerning the Parental Refundable Tax Credit: [email protected] or 803-898-5706.