With the surprising results of the November Presidential election, many companies, especially small businesses, responded with optimism. During his inaugural address, President Trump made this promise: “We will follow two simple rules: Buy American and hire American.” Even before his inauguration, a number of companies, including Ford, Amazon, Lockheed Martin, Walmart and many others, announced their intentions to expand their operations in the US and to hire American workers.
Following the inauguration, the US economy gained 227,000 jobs in January and the Dow surpassed 20,000 while the S&P 500 and NASDAQ also moved into record territory. This is good news for business, for investors and for America. If you’re a business owner and you’re adding new jobs, don’t overlook the tax advantages available to you through the South Carolina New Jobs Credit. You can find the appropriate forms on the South Carolina Department of Revenue website (dor.sc.gov)—SC Schedules TC 4, TC-4SB and TC-4SA for Common Business, Small Business, and Accelerated Small Business, respectively.
The forms each include General Instructions to help you properly complete the documentation. Your business qualifies for credits if it operates in manufacturing, tourism, processing, warehousing, distribution, research and development facilities, corporate offices, qualifying service-related facilities, agribusiness operations, extraordinary retail establishments, qualifying technology intensive facilities and banks. Credits can be claimed for five years beginning in Year 2 after the creation of each new full time job. (Small Businesses and Accelerated Small Businesses can claim credit beginning in the year the new full-time job was created.)
What is the credit worth to you? It depends on your company’s size and the county where your business operates. Each year, South Carolina counties are designated into one of four categories—Tier I (least favorable) through Tier IV (most favorable) after considering each county’s unemployment rate and per capita income. For Common Business with new full-time jobs created in tax years that began in 2011 or later, the amount of the credit ranges from $1500 (Tier I counties) to $8000 (Tier IV counties) for each new full-time job. If you’re a Small Business or Accelerated Small Business and the gross wages of the full-time job created are equal to or greater than 120% of the county’s or the State’s per capita income (whichever is lesser), the initial amount of the credit ranges from $1500 (Tier I counties) to $8000 (Tier IV counties) for each new full-time job. If the gross wages of the full-time job are less than 120% of both the county’s and State’s per capita income, the initial amount of the credit ranges from $750 (Tier I counties) to $4000 (Tier IV counties) for each new full-time job. For facilities that are located in a multi-county business or industrial park, there is an additional $1000 credit for each new full-time job created.
The General Instructions include definitions of each type of business operation as well as guidance on how to calculate the number of qualifying new full-time jobs. Note there is also a restriction on the amount of credit that can be used in a year—it may not exceed 50% of the taxpayer’s South Carolina income tax, bank tax or insurance premium tax liability. However, unused credits may be carried forward for 15 years and must be used in future years in the order in which they were claimed.
Have you been missing out on this valuable tax benefit? No matter how you answered that question, here’s another question for you: how confident are you that you’re taking advantage of all the tax benefits available to your company? That’s why we need to talk. Consultation on New Jobs Credit is just one of many ways that we can help you benefit from the constant changes that are made to our tax laws. At BGC LLC, you know you’ll be dealing with professionals in accounting as well as Federal and State tax law. We are eager to earn your business… and your trust.