Job development credit
South Carolina’s Enterprise Program includes the Job Development Credit, a performance-based incentive designed to offset the cost of locating or expanding a business facility in the state.
Unlike other tax incentives that reduce a specific tax liability, the Job Development Credit provides funds that represent actual cash contributions to an approved project. This allows South Carolina to lower the effective cost of investment and support a company’s bottom line.
How the Job Development Credit works
The Job Development Credit uses the personal income tax withholding of new employees to reimburse qualified and approved companies. These reimbursements are tied to eligible capital expenditures associated with projects that:
- Create new full-time jobs; and
- Provide healthcare benefits for South Carolina employees.
Eligible capital expenditures may include:
- Land
- Building
- Site development
- Pollution control equipment
- Infrastructure
The program is administered by the Coordinating Council.
Source of funds
Funds for the Job Development Credit come from state personal income tax withholding paid by a company’s employees. Employees receive a credit equal to the withholding used by the company. As a result, there is no financial impact on employees.
A company may not claim a credit on any employee whose job was created in South Carolina before the taxable year in which the company was approved for the program. The Coordinating Council generally caps annual collections at no more than $3,250 per employee per year.
Compliance and reporting requirements
To verify eligible capital expenditures and qualifying jobs, a company must:
- Make payroll books and records available for inspection by the Coordinating Council and the Department of Revenue; and
- Furnish a report prepared by the company that itemizes the sources and uses of funds.
This report must be filed by June 30 following the calendar year in which the reimbursements are received.
Frequently asked questions
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