H 3906 General Bill, By Kirsh

Similar(S 667)
 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 Income Tax, so as to provide that the retirement income deduction
 is the first three thousand dollars of retirement income until age sixty-five,
 when the deduction is the first ten thousand dollars of retirement income.

   04/13/93  House  Introduced and read first time HJ-8
   04/13/93  House  Referred to Committee on Ways and Means HJ-8

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 INCOME TAX, SO AS TO PROVIDE THAT THE RETIREMENT INCOME DEDUCTION IS THE FIRST THREE THOUSAND DOLLARS OF RETIREMENT INCOME UNTIL AGE SIXTY-FIVE, WHEN THE DEDUCTION IS THE FIRST TEN THOUSAND DOLLARS OF RETIREMENT INCOME.

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 added by Act 171 of 1991, is 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) (2) 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.

(6) (3) 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) (4) 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) (5) (A) For a taxpayer born in the years 1943 through 1959, where subitems subitem (1), (2), and (4) of this item refer refers to age sixty-five, the applicable age is sixty-six.

(B) For a taxpayer born after 1959, where subitems subitem (1), (2), and (4) of this item refer refers to age sixty-five, the applicable age is sixty-seven."

SECTION 2. Upon approval by the Governor, this act is effective for taxable years beginning after 1992.