South Carolina R&D credit rules for TY2026
Each row is a field from the registry entry our engine applies. A blank field says so; it is never filled in.
Program flags on this entry
- Wages in state
- Yes
- Contract research in state
- Yes
- Credit for TY2026
- Current credit Yes. Our rules registry carries a current South Carolina research credit for tax year 2026.
- Structure
- Non-incremental: the credit applies to qualified research expenses directly
- Credit rate
- 5% of qualified research expenses
- Base method
- There is no base amount to subtract: the rate applies to South Carolina qualified research expenses directly.
- Statutory liability limitation
- §12-6-3415(B): the credit taken in any one taxable year may not exceed 50% of the taxpayer's REMAINING tax liability after all other credits have been applied - this credit is ordered last and the cap is computed on the post-other-credits residual (TC-18 lines 5-9). Tax liability is outside the study's data; the preparer applies the cap on the return.
- Carryforward
- 10 years
- Carryback
- None recorded
- Refundable?
- Not refundable An affirmative determination in the registry, carried against the statute cited below.
- State form
- SC Sch. TC-18 (credit code 018)
- Statute
- S.C. Code Ann. §12-6-3415
How the South Carolina credit is computed
The South Carolina credit is non-incremental: the rate applies to state qualified research expenses directly, with no base amount subtracted. The registry carries a rate of 5%.
There is no base amount to subtract: the rate applies to South Carolina qualified research expenses directly.
Unused credit carries forward 10 years. Refundability: not refundable.
Ricerca computes the South Carolina figure from the same substantiated expenses as the federal §41 credit, under the registry entry for the year claimed. Where the registry is silent, the study says so and the point is resolved with your return preparer, not assumed.
Claiming it alongside the federal credit
The federal §41 credit comes first: it is computed from the qualified research expenses the study substantiates and filed on Form 6765 with the return. The South Carolina credit is then computed from that same base under the state's own rules.
State credits generally reach only research performed in the state, so the study records where each expense was incurred as it is built, not at filing time.
One base, two computations
- 1 Qualify the activities under the four-part test and total the year's QREs.
- 2 Compute the federal §41 credit and file it on Form 6765.
- 3 Apply the South Carolina entry above to the South Carolina share of that base, and file it on SC Sch. TC-18 (credit code 018).
What the registry tells the preparer
These notes travel with the South Carolina entry inside the platform, reproduced verbatim for the person signing the return.
- ELIGIBILITY GATE: the credit is allowed only to a taxpayer that actually claims the FEDERAL §41 credit for the same taxable year (§12-6-3415(A)) - confirm the federal claim is on the return before taking the state credit.
- QREs take the IRC §41 meaning (the statute incorporates it by reference; TC-18 cites §41(b)) but count only expenses MADE IN South Carolina. South Carolina's IRC conformity is fixed-date (currently the Code as amended through December 31, 2024), so §41 definitions pin to that conformity date, not the live Code.
- Carryforward expiry runs per QRE VINTAGE: unused credit may not be used for a taxable year beginning on or after ten years from the DATE of the qualified research expenses (§12-6-3415(B)) - track carryforward by expense-year vintage, not as a pooled 10-year clock.
- The credit applies against income tax AND the §12-20-50 corporate license fee.
- NO REFUND PROVISION EXISTS. Online summaries sometimes surface a 'fewer than 150 employees / 75% refund / $5M cap' provision - that is the text of H.3592 (2011-2012 session), which died in committee and was never enacted. Do not model it.
Registry sources
The citations the South Carolina registry entry carries, verbatim: what the study cites and a reviewer can check.
- Statute
- S.C. Code Ann. §12-6-3415
- Form
- SC Sch. TC-18 (credit code 018)
Registry entry version 2024.2, exported from services/study-api/app/engines/rules_engine.py (STATE_RULES_2024 + STATE_RULES_REGIME_OVERRIDES via RulesEngine.get_state_rules) on September 10, 2026. The entry above governs TY2026; a study for an earlier year uses that year's entry.
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