5 new changes for the 2023 SC tax season to know to get the most out of your filing this year

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The 2023 tax season is officially underway and many South Carolinians have new changes to be aware of before filing.

The IRS began accepting 2022 tax returns on Monday. The 2023 tax season deadline is set for April 18 and the IRS expects more than 168 million individual tax returns to be filed this year.

The South Carolina Department of Revenue also began accepting tax returns on Monday, however, the agency won’t start processing them until Feb. 6 to give employers time to meet the Jan. 31 W-2 submission deadline. Also, tax return and refund processing is expected to take six to eight weeks from Feb. 6 or the date a tax return is filed.

As South Carolinians prepare their tax returns though, they should keep in mind that there have been a few changes to consider, SCDOR states.

5 new things to know for SC 2023 tax season

No state taxes on rebate

South Carolina residents who received a 2022 state tax rebate might get a 1099G. However, they owe no state taxes on the rebate since it is considered a refund.

Military retirement pay exclusion

All military retirement pay is excluded from South Carolina Individual Income Tax beginning in tax year 2022 because of a law enacted last year. Reduce the retirement deduction and the 65 years old and older deduction by the amount of military retirement deduction take, SCDOR states.

For more details, click here.

More from the motor fuel user fee credit

The refundable credit has been increased from $0.09 a gallon to $0.11 a gallon for tax year 2022. Full or part-year taxpayers can “claim the refundable credit for the lesser of the increase in South Carolina Motor Fuel User Fee they paid during 2022 or the preventative maintenance costs they incurred in South Carolina during the tax year.”

Dependent exemption increase

According to SCDOR, the exemption amount is $4,430 for the 2022 tax year and is allowed for every eligible dependent, which includes qualifying relatives and children.

More for earned income tax credit

Full-year residents can claim the South Carolina earned income tax credit if they’re eligible for the federal credit, which you can check by clicking here. The non-refundable credit for the 2022 tax year is equal to 104.17% of the federal earned income tax credit allowed to the taxpayer.

2023 tax season filing tips

  • As you prepare to file your tax return, SCDOR and the IRS recommend using the online tools and resources available at dor.sc.gov/iit and IRS.gov to get started.

  • File electronically and choose direct deposit for the fastest processing.

  • Visit dor.sc.gov/iit-filing to learn about free and low-cost electronic filing options.

  • Learn more about direct deposit with SCDOR by clicking here.

  • Make sure you have all your important tax documents, like W-2s and 1099s, before you file.

  • Check to ensure your current mailing address is included before submitting your return, even if you choose direct deposit for your refund.