What you need to know:
Taxpayers whose gross income does not require them to file an Individual Income Tax return may still benefit from filing.
Some tax credits are refundable, meaning the portion of the credit that is more than what the taxpayer owes can be refunded to them. Filing a return is the only way that taxpayers can claim these refundable tax credits.
Tax returns are a key document used to apply for college financial aid.
Each year in South Carolina, thousands of people earn some income but not enough to require them to file an Individual Income Tax return. For instance, single taxpayers under 65 who make less than $13,850 are not required to file a return.
However, just because you aren’t required to file a return doesn’t mean it’s not in your best interest. In fact, you could be leaving money on the table if you choose not to file.
Before the April 15 return deadline passes, the South Carolina Department of Revenue (SCDOR) wants individuals and families to consider the benefits of filing before they decide not to file a return.
Here are 5 reasons why you should consider filing, even if you may not have to:
Filing a return is the only way to claim tax credits – some of which are refundable. Why is that important? Because when a credit is refundable, the portion of the credit that is greater than your tax liability is added to your refund. Depending on the credit, you may be able to claim it even if you have no tax liability.
For example, the Tuition Tax Credit is a refundable credit of up to $1,500 for students attending a qualifying college or university in South Carolina. But students who don’t file a return can’t claim this credit!
Learn more about state refundable credits at dor.sc.gov/taxcredits. More information about federal refundable credits is available at irs.gov/credits-and-deductions-for-individuals.
Filing a return is the only way to receive a refund. Taxpayers who worked during the year but don’t make enough to file are likely eligible for a refund of the taxes that were withheld from their paychecks, but only if you file a return. This is often the case for students who work when not in school or seniors working part-time.
Filing a return helps build Social Security benefits. The income used on a tax return is used to calculate Social Security benefits, so underreporting income could lead to an incorrect calculation.
Filing a return creates a key document used when applying for college financial aid. Also, the IRS’s Data Retrieval Tool helps students easily transfer their tax information to their FAFSA form.
If circumstances change and you decide to file more than three years after a return was due, you no longer have the option to receive a refund.
Learn More
For more information on South Carolina Income Tax filing requirements, visit dor.sc.gov/iit.
