Current Status Bill Number:4743 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19980303 Primary Sponsor:Hinson All Sponsors:Hinson Drafted Document Number:jic\5204htc.98 Residing Body:House Current Committee:Ways and Means Committee 30 HWM Subject:Income tax deductions, retirement income; annual deduction for certain aging; joint returns; Taxation, exemptions
Body Date Action Description Com Leg Involved
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House 19980303 Introduced, read first time, 30 HWM
referred to Committee
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TO AMEND SECTION 12-6-1140, AS AMENDED, AND SECTION 12-6-1170, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE RETIREMENT INCOME DEDUCTION ELECTION AND THE TAXABLE INCOME EXCLUSION ALLOWED PERSONS SIXTY-FIVE YEARS OF AGE OR OLDER FOR PURPOSES OF THE STATE INDIVIDUAL INCOME TAX, SO AS TO ELIMINATE THE ELECTION AND ALLOW AN ANNUAL DEDUCTION OF UP TO THREE THOUSAND DOLLARS OF RETIREMENT INCOME AND UP TO TEN THOUSAND DOLLARS BEGINNING IN THE TAXABLE YEAR THE TAXPAYER ATTAINS AGE SIXTY-FIVE, AND TO ALLOW AN ANNUAL DEDUCTION OF FORTY-FIVE THOUSAND DOLLARS OF SOUTH CAROLINA TAXABLE INCOME BEGINNING IN THE TAXABLE YEAR THE TAXPAYER ATTAINS THE AGE OF SIXTY-FIVE YEARS REDUCED BY THE RETIREMENT INCOME DEDUCTION, TO PROVIDE FOR CLAIMING THIS DEDUCTION ON JOINT RETURNS, AND TO DELETE PROVISIONS RELATING TO THE POSTPONEMENT OF THE MAXIMUM DEDUCTION UNDER THE PRIOR LAW.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) Section 12-6-1140(3) of the 1976 Code, as
added by Act 76 of 1995, is amended to read:
"(3) a deduction for retirement income as provided in Section 12-6-1170;"
(B) Section 12-6-1140 of the 1976 Code, as last amended by Section 2A, Part II of Act 155 of 1997, is further amended by deleting item (9) which reads:
"(9) South Carolina taxable income received by a resident individual taxpayer who before or during the applicable taxable year has attained the age of sixty-five. If a married taxpayer eligible for this deduction files a joint federal income tax return with a spouse who is not eligible for this deduction, then their joint income must be allocated between them on a pro-rata basis in the manner the department shall provide."
SECTION 2. Section 12-6-1170 of the 1976 Code, as added by Act 76 of 1995, is amended to read:
"Section 12-6-1170. (A)(1) An individual is allowed an annual deduction from South Carolina taxable income for of not more than three thousand dollars of retirement income received as follows:
(1) For taxable years after 1992, and beginning on the first taxable year a taxpayer receives retirement income, the taxpayer may:
(a) deduct up to three thousand dollars of retirement income that is included in South Carolina taxable income; or
(b) irrevocably elect to defer the annual retirement income deduction until the taxable year in which the taxpayer reaches age sixty-five. Beginning in the year in which the taxpayer reaches age sixty-five, the taxpayer may deduct up to not more than ten thousand dollars of retirement income that is included in South Carolina taxable income.
(2) Taxpayers are deemed to have made the election provided in subitem (1)(b) and may deduct up to ten thousand dollars of retirement income included in South Carolina taxable income if:
(a) the taxpayer does not claim a retirement income deduction before the taxable year he reaches age sixty-five; or
(b) the taxpayer reaches age sixty-five before 1994.
(3) As used in this section, all references to age sixty-five apply to taxpayers born before 1943. For taxpayers born in 1943 through 1959, the applicable age for determining the retirement income deduction is age sixty-six and age sixty-seven for taxpayers born after 1959.
(4) (2) The term 'retirement income', as used in this section subsection, 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.
(5)(3) A surviving spouse receiving retirement income that is attributable to the deceased spouse shall apply this deduction 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)(4) The department shall prescribe the method of making the election to defer the retirement income deduction and may require the taxpayer to provide information necessary for proper administration of this election subsection.
(B) Beginning for the taxable year during which a resident individual taxpayer attains the age of sixty-five years, the resident individual taxpayer is allowed a deduction from South Carolina taxable income received in an amount not to exceed forty-five thousand dollars reduced by any amount the taxpayer deducts pursuant to subsection (A). If a married taxpayer eligible for this deduction files a joint federal income tax return, then the maximum deduction allowed is forty-five thousand dollars in the case when only one spouse has attained the age of sixty-five years and ninety thousand dollars when both spouses have attained such age."
SECTION 3. Upon approval by the Governor, this act is effective for taxable years beginning after 1997.