A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS by ENACTing THE "WORKING FAMILY CHILD TAX CREDIT" BY ADDING SECTION 12-6-3830 SO AS TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN INDIVIDUALS WITH QUALIFYING CHILDREN.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  This act may be cited as the "Working Family Child Tax Credit."

 

SECTION 2.  (A) The General Assembly finds that recent changes to the state's income tax structure may alter the distribution of tax liability across income levels.

    (B) The General Assembly finds that working families, particularly those with lower and moderate incomes, may bear a disproportionate share of total tax burden due to:

       (1) higher relative consumption of taxable goods and services; and

       (2) limited access to deductions and tax planning mechanisms.

    (C) The General Assembly recognizes that strong families are essential to a stable workforce, economic mobility, and long-term economic growth in the State.

    (D) It is the intent of this act to:

       (1) provide targeted tax relief to working families with qualifying children;

       (2) prevent unintended increases in effective tax burdens on lower and middle-income households;

       (3) support workforce participation and household financial stability; and

       (4) ensure that the benefits of tax reform are equitably distributed.

    (E) Nothing in this act may be construed to increase the tax liability of any taxpayer above what would otherwise be owed under existing law.

 

SECTION 3.  Article 25, Chapter 6, Title 12 of the S.C. Code is amended by adding:

 

    Section 12-6-3830. (A) An individual taxpayer is allowed a credit against the tax imposed pursuant to Section 12-6-510 for each qualifying child, as defined by the Internal Revenue Service, equal to:

       (1) four hundred dollars per qualifying child for a household with a federal adjusted gross income of less than sixty thousand dollars;

       (2) three hundred dollars per qualifying child for a household with a federal adjusted gross income between sixty thousand dollars and one hundred thousand dollars; and

       (3) two hundred dollars per qualifying child for a household with a federal adjusted gross income between one hundred thousand dollars and one hundred twenty-five thousand dollars.

    (B) If the credit allowed by this section exceeds the taxpayer's state income tax liability, then fifty percent of the excess credit must be refunded to the taxpayer. For taxpayers with a federal adjusted gross income below forty thousand dollars, seventy-five percent of the excess credit must be refunded to the taxpayer.

    (C) The credit provided pursuant to this section may be claimed in addition to the Earned Income Tax Credit allowed pursuant to Section 12-6-3632.

    (D) Beginning with tax year 2028, the credit amounts provided in subsection (A) must be adjusted annually for inflation based on the Consumer Price Index or other appropriate measure as determined by the Revenue and Fiscal Affairs Office.

    (E) The department may promulgate regulations to implement the provision of this section and may require documentation that it considers necessary to administer the credit.

 

SECTION 4.  This act takes effect upon approval by the Governor and first applies to income tax years beginning after 2026.

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