H 3270 Session 111 (1995-1996)
H 3270 General Bill, By Richardson, Bailey, J. Brown, B.D. Cain, C.D. Chamblee,
J.L.M. Cromer, J.L. Harris, Harvin, W.D. Keyserling, Lloyd, McKay,
Moody-Lawrence, Stuart and Witherspoon
A Bill to amend Section 12-7-435, as amended, Code of Laws of South Carolina,
1976, relating to deductions from South Carolina taxable income for purposes
of the state individual income tax, so as to eliminate the retirement income
exclusion election and provide for the deduction of all retirement income
beginning for the taxable year the taxpayer attains age sixty-five and provide
for the deduction for surviving spouses.
01/17/95 House Introduced and read first time HJ-8
01/17/95 House Referred to Committee on Ways and Means HJ-9
A BILL
TO AMEND SECTION 12-7-435, AS AMENDED, CODE OF
LAWS OF SOUTH CAROLINA, 1976, RELATING TO
DEDUCTIONS FROM SOUTH CAROLINA TAXABLE INCOME
FOR PURPOSES OF THE STATE INDIVIDUAL INCOME TAX,
SO AS TO ELIMINATE THE RETIREMENT INCOME
EXCLUSION ELECTION AND PROVIDE FOR THE
DEDUCTION OF ALL RETIREMENT INCOME BEGINNING
FOR THE TAXABLE YEAR THE TAXPAYER ATTAINS AGE
SIXTY-FIVE AND PROVIDE FOR THE DEDUCTION FOR
SURVIVING SPOUSES.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 12-7-435(k) of the 1976 Code, as last
amended by an Act of 1994 bearing ratification number 575, is
further amended to read:
"(k) (1) Beginning with the taxable year in which a
taxpayer first receives retirement income, the taxpayer may:
(A) deduct his retirement income in an amount not to
exceed three thousand dollars annually; or
(B) elect irrevocably to defer claiming a retirement
income deduction until the taxable year the taxpayer attains the age
of sixty-five years, at which time the taxpayer may deduct his
retirement income in an amount not to exceed ten thousand dollars
annually.
(2) A taxpayer who does not claim a retirement income
deduction before the taxable year in which he attains the age of
sixty-five years is considered to have made the election allowed
pursuant to subitem (1)(B) of this item.
(3) A taxpayer who has attained the age of sixty-five years
before 1994 is considered to have made the election allowed
pursuant to subitem (1)(B) of this item.
(4) A taxpayer who in 1993 has not yet attained the age of
sixty-five years and who receives retirement income in 1993 may:
(A) deduct his retirement income in an amount not to
exceed three thousand dollars annually; or
(B) elect irrevocably to defer claiming a retirement
income deduction until the taxable year the taxpayer attains the age
of sixty-five years, at which time the taxpayer may deduct his
retirement income in an amount not to exceed ten thousand dollars
annually.
(5) The deduction allowed by this item extends to the
taxpayer's surviving spouse and, to the extent the surviving spouse
receives retirement income attributable to the deceased spouse,
applies in the same manner that the deduction applied to the
deceased spouse. If the surviving spouse also has another retirement
income, an additional retirement exclusion is allowed.
(6) For purposes of this item, "retirement
income" means the total of all otherwise taxable income not
subject to a penalty for premature distribution received by the
taxpayer or the taxpayer's surviving spouse in a taxable year from
qualified retirement plans which include those plans defined in
Internal Revenue Code Sections 401, 403, 408, and 457, and all
public employee retirement plans of the federal, state, and local
governments, including military retirement for persons with twenty
or more years active military duty.
(7) The commission shall prescribe the method of making
the election provided in this item and may require the taxpayer to
provide information necessary for proper administration of this
election. (8)(A) For a taxpayer born in the years 1943 through
1959, where subitems (1), (2), and (4) of this item refer to age
sixty-five, the applicable age is sixty-six. (B) For a taxpayer born
after 1959, where subitems (1), (2), and (4) of this item refer to age
sixty-five, the applicable age is sixty-seven.
(1) Retirement income received by a resident
individual taxpayer who before or during the applicable taxable year
has attained age sixty-five. The deduction allowed by this item
extends to a deceased taxpayer's surviving spouse, regardless of
age, but only for retirement income attributable to the deceased
taxpayer. Retirement income received by a surviving spouse
attributable to a deceased taxpayer who died before attaining age
sixty-five may be deducted by the surviving spouse beginning in the
taxable year the deceased taxpayer would have attained age
sixty-five.
(2) For purposes of this item `retirement income' means the
total of all otherwise taxable income received in a taxable year by a
taxpayer who has attained age sixty-five or the taxpayer's surviving
spouse from qualified retirement plans which include those plans
defined in Internal Revenue Code Sections 401, 403, 408, and 457,
and all public employee retirement plans of the federal, state, and
local governments, including military retirement for persons with
twenty or more years active military duty."
SECTION 2. Upon approval by the Governor, this act is
effective for taxable years beginning after 1994.
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