Current Status Introducing Body:Senate Bill Number:408 Primary Sponsor:Waddell Committee Number:06 Type of Legislation:GB Subject:Income tax deductions, retirement income Residing Body:Senate Current Committee:Finance Computer Document Number:JIC/5077.HC Introduced Date:Jan 09, 1991 Last History Body:Senate Last History Date:Jan 09, 1991 Last History Type:Introduced and read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Waddell Giese Type of Legislation:General Bill
Bill Body Date Action Description CMN
---- ------ ------------ ------------------------------ ---
408 Senate Jan 09, 1991 Introduced and read first 06
time, referred to Committee
View additional legislative information at the LPITS web site.
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 CONSOLIDATE INTO ONE ITEM THE DEDUCTIONS ALLOWED FOR VARIOUS TYPES OF RETIREMENT INCOME, TO DEFINE RETIREMENT INCOME, TO PROVIDE THAT A TAXPAYER MAY DEDUCT UP TO THREE THOUSAND DOLLARS OF RETIREMENT INCOME BEGINNING AT AGE SIXTY-TWO OR ELECT TO DEFER HIS DEDUCTION UNTIL AGE SIXTY-FIVE, AT WHICH TIME THE TAXPAYER MAY DEDUCT UP TO TEN THOUSAND DOLLARS, TO PROVIDE TRANSITION PROVISIONS, TO PROVIDE THAT THE AGES AT WHICH TAXPAYERS MAY DEDUCT RETIREMENT INCOME MUST RISE IN TANDEM WITH ELIGIBILITY FOR SOCIAL SECURITY OLD AGE BENEFITS AND TO PROVIDE THAT THE SOUTH CAROLINA TAX COMMISSION SHALL PRESCRIBE THE METHOD OF MAKING THE ELECTION; AND TO REPEAL SECTION 12-7-436 RELATING TO AN OBSOLETE LIMITATION ON THE RETIREMENT INCOME DEDUCTION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-7-435 of the 1976 Code, as last amended by Act 189 of 1989, is further amended by adding an appropriately lettered item to read:
"( )(1) Beginning with the taxable year in which a taxpayer at least sixty-two years of age 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 and every taxpayer who attains the age of sixty-five years before 1992 is considered to have made the election allowed pursuant to subitem (1)(B) of this item.
(3) A taxpayer who attains the age of sixty-three or sixty-four years in 1991 and who receives retirement income in 1991 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.
(4) 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.
(5) For purposes of this item, `retirement income' means the total of all otherwise taxable income received by the taxpayer or his surviving spouse in a taxable year from qualified retirement plans. A qualified retirement plan, for purposes of this item, means 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.
(6) 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.
(7) Notwithstanding the reference to the age of sixty-two years and sixty-five years in subitems (1) and (2) of this item, no taxpayer first receiving retirement income after 1992 may make the election allowed pursuant to subitem (1) of this item or deduct retirement income before the taxable year in which he attains the age at which taxpayers are first eligible to receive reduced social security old age benefits and no taxpayer electing to defer claiming a deduction in order to deduct a larger amount may deduct that larger amount in a taxable year before the taxpayer attains the age at which the taxpayers are first eligible to receive unreduced social security old age benefits."
SECTION 2. Section 12-7-435(a), (b), and (c) of the 1976 Code are amended to read:
"(a) Any retired person, or his surviving spouse, who receives a federal civil service retirement annuity is allowed to deduct from taxable income three thousand dollars of the annuity received each taxable year exclusive of any other exemption. The provisions of this item do not apply to retired persons who are now exempt from payment of taxes on federal civil service retirement annuities.Reserved
(b) Any person retired from the uniformed services of the United States with twenty or more years active duty service, or his surviving spouse, is allowed to deduct from taxable income three thousand dollars of his uniformed services retirement pay received each taxable year.Reserved
(c) Any retired person, or his surviving spouse, who attains the age of sixty-five before the close of the taxable year and who receives income under one or more qualified pension programs is allowed to deduct from taxable income three thousand dollars of the pension income received in each taxable year. If the pension income also qualifies for a deduction from taxable income under the provisions of items (a) or (b) of this section, no deduction from taxable income is permitted under the provisions of this item.Reserved"
SECTION 3. Section 12-7-435(d) and (e) of the 1976 Code, as last amended by Section 39, Part II, Act 189 of 1989, are further amended to read:
"(d) The first three thousand dollars of the total amount received by a taxpayer from the various state retirement systems as provided in Title 9 and from the retirement systems of other states. Reserved
(e) The first three thousand dollars of retirement pay received by police officers or firemen from a South Carolina municipality or county group retirement plan.Reserved"
SECTION 4. Section 12-7-436 of the 1976 Code is repealed.
SECTION 5. Upon approval by the Governor, this act is effective for taxable years beginning after 1990.