New SC income tax credit offers big help to parents

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As South Carolina families prepare and file their taxes; some may be leaving money on the table.

Those with children at certain independent schools like Beaufort Academy may be eligible for a generous new refund on their tuition payments through the Educational Credits for Exceptional Needs Children, or ECENC.

South Carolina’s ECENC helps students with special needs –broadly defined– attend credentialed private schools. Parents of eligible students at approved schools can claim credits for their tuition payments dating back to August of 2015.

The tuition tax credits work like payment toward an individual’s or family’s South Carolina income tax bill, using money the family has already paid as school tuition. The credit can reduce the taxpayer’s liability below zero allowing them to receive a tax refund. If the amount of the credit -up to $10,000 for tuition paid- is larger than the taxes owed, they will receive a refund for the difference.

A list of over 100 participating schools is available from the South Carolina Education Oversight Committee (EOC) at eoc.sc.gov. Details of the claim process and the student criteria are also available at www.ECENC.org.

Only parents or guardians of exceptional needs students, attending eligible schools, can apply for the new dollar-for-dollar credits. There is also a statewide cap of $4 million in credits, reserved on a first come, first served basis. South Carolina’s Department of Revenue (DOR) reports that only about $2 million in the credits have been claimed so far due to limited awareness of the new program.

First, parents make their payment to an eligible school for an exceptional needs student’s tuition. Then, parents complete and submit a form TC-57A to the South Carolina Department of Revenue. They must save documentation of their child’s eligibility for their own records. This can be either a public school issued individualized education plan (IEP) or the determination of a private, third party, educational or medical expert. Next, DOR confirms the reservation of the family’s credit. Finally, when the family completes its state income tax filing the value of the refundable credit is applied. Parents can still apply for the credit for tuition paid in 2015.