SC SC Revenue Ruling #07-2 Income Tax 2007-05-01

How did South Carolina's annual and alternative monthly job tax credits work for small businesses under the 2007 guidance?

Short answer: A qualifying business with 99 or fewer worldwide employees generally needed a monthly average increase of at least two new full-time South Carolina jobs. It could use an annual credit claimed in years two through six or elect an accelerated monthly method for up to 60 consecutive months, with credit amounts affected by county and wages.

Apply this to your situation

This page answers the general question as of 2007. Ezel answers yours, under current South Carolina tax law, with citations.

Disclaimer: Historical guidance only. This 2007 ruling applied to tax years beginning on or after January 1, 2006 and superseded SC Revenue Ruling #05-17. Its business definitions, job thresholds, county amounts, wage tests, forms, and computational rules should be checked against current statutes and Department guidance before claiming a credit. This summary is informational only and is not legal or tax advice.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

South Carolina expanded its job tax credit rules for a qualifying small business with 99 or fewer total employees worldwide. For most eligible facilities, the business had to create and maintain a monthly average increase of at least two new full-time South Carolina jobs rather than the 10 jobs generally required for the traditional credit.

The ruling described two small-business options. The annual method under S.C. Code § 12-6-3360(C)(2) produced a five-year credit claimed in years two through six after job creation. The alternative monthly method under § 12-6-3362 accelerated the credit into the job-creation period and allowed it for up to 60 consecutive months beginning with the first full month wages were paid.

Credit amounts depended on the county tier and employee wages. Jobs paid at or above 120% of the lower of county or state average per capita income could receive 100% of the applicable basic credit; lower-paid jobs generally received 50%. The monthly method prorated the amount by month and could not exceed the maximum annual credit. A taxpayer could not switch among the traditional, annual-small-business, and monthly-small-business methods within the same credit period.

What this means for you

New and expanding small businesses

The 99-employee test was applied worldwide, with the taxpayer allowed to measure at the beginning or end of the first job-creation year. The status was determined each time a new credit period began, not again in later years of that same period.

Employers counting jobs

A full-time job required at least 35 hours per week for the normal operating year. Two qualifying half-time jobs of at least 20 hours each counted as one full-time equivalent, while transferred and leased employees generally did not qualify.

Businesses choosing annual or monthly treatment

The annual method delayed the credit but used annual job and wage calculations. The monthly method accelerated the benefit but required full-month wages and more detailed month-by-month computations.

Common questions

Q: What counted as a small business?
A: A qualifying taxpayer with 99 or fewer total employees at all locations worldwide at the permitted measurement date.

Q: How many jobs were generally required?
A: A monthly average increase of at least two new full-time jobs, subject to special rules for certain tourism and service-related facilities.

Q: What was the key annual-versus-monthly difference?
A: The annual credit was claimed in years two through six; the monthly alternative began with qualifying full-month wages and lasted no more than 60 consecutive months.

Q: How did wages affect the credit?
A: Jobs meeting the 120% per-capita-income threshold could receive the full basic amount, while jobs below it generally received half.

Q: Could unused credit carry forward?
A: The ruling allowed a 15-year carryforward and limited the credit used in one year to 50% of the applicable South Carolina tax liability.

Citations and references

S.C. Code § 12-6-3360(C)(1) (traditional annual job tax credit)
S.C. Code § 12-6-3360(C)(2) (annual small-business job tax credit)
S.C. Code § 12-6-3362 (alternative monthly small-business job tax credit)
S.C. Code § 12-6-3360(M) and Regulation 117-750.1 (qualifying facilities and facility definition)
SC Revenue Rulings #99-5 and #05-5 (job-credit and expansion guidance cited by the ruling)

Source

Landing page: https://dor.sc.gov/advisory-opinion-search
Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR07-2.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 12265, Columbia, South Carolina 29211
Website Address: http://www.sctax.org
SC REVENUE RULING #07-2

SUBJECT:

Job Tax Credit – New Small Business Provisions
(Income Tax)

EFFECTIVE DATE: Tax Years Beginning On or After January 1, 2006
SUPERSEDES:

SC Revenue Ruling #05-17 and any oral directives in conflict
herewith.

REFERENCES:

S. C. Code Ann. Section 12-6-3360 (Supp. 2006)
S. C. Code Ann. Section 12-6-3362 (Supp. 2006)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 2000)
S. C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #05-2

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the
public and to Department personnel. It is an advisory opinion
issued to apply principles of tax law to a set of facts or general
category of taxpayers. It is the Department’s position until
superseded or modified by a change in statute, regulation, court
decision, or another Departmental advisory opinion.

INTRODUCTION:
South Carolina Code Title 12, Chapter 6 contains three job tax credit provisions. The
provisions are contained in Code Section 12-6-3360(C)(1), the “traditional” annual job
tax credit, Code Section 12-6-3360(C)(2), the “annual” small business job tax credit, and
Code Section 12-6-3362, the “monthly” alternative small business job tax credit.
In general, the job tax credit is available to qualifying types of new or expanding
businesses creating a minimum monthly average number of new, full time jobs in South
Carolina. Sole proprietorships, partnerships, corporations, S corporations, and limited
liability companies that are a qualifying business type (e.g., manufacturing facility,
processing facility, etc.) are eligible. The credit taken in one tax year may not exceed
50% of the taxpayer’s South Carolina income tax, insurance premium tax, or bank tax
liability. Any unused credit may be carried forward for 15 years.

An overview of the three job tax credit provisions is provided below. Also, a general
comparison of the three job tax credits is provided in the Appendix for use as a quick
reference tool; it is a simplification and may be misleading if not used in conjunction
with this advisory opinion and in researching the law. Since the qualifying requirements,
the credit amount and computation, and the time in which the credit may be first claimed
may differ depending on the specific credit provision, the applicable South Carolina job
tax credit statute should be carefully reviewed. Careful consideration should be given to
which specific credit the taxpayer will claim since that provision is applicable for the
entire credit period. (See Questions 27 and 32).
Code Section 12-6-3360(C)(1) - “Traditional” annual job tax credit for any size business.
Code Section 12-6-3360(C)(1) provides a job tax credit for a qualifying taxpayer,
regardless of size, creating and maintaining a minimum monthly average increase of new,
full time jobs in South Carolina. For most taxpayers, the minimum monthly average
increase for the tax year is 10; see Question 1 for exceptions to the minimum, and
Question 8A for an explanation of monthly average. The credit amount depends, in part,
on the county where the taxpayer’s facility is located. The credit is claimed on the
taxpayer’s tax return for 5 years (Years 2 through 6) beginning in the year following the
year of the creation of the new jobs (Year 1), provided the jobs are maintained. The credit
is claimed on Form TC-4.
Code Section 12-6-3360(C)(2) - “Annual” small business job tax credit. For tax years
beginning on or after January 1, 2006, the “traditional” job tax credit was expanded to
make it available to certain types of small businesses (i.e., a business with 99 or fewer
total employees worldwide) by lowering the monthly average number of jobs required to
be created. Code Section 12-6-3360(C)(2) provides a job tax credit for a qualifying small
business taxpayer creating and maintaining a minimum monthly average new, full time
jobs in South Carolina. For most taxpayers, the minimum monthly average increase for
the tax year is 2; see Question 1 for exceptions to the minimum, and Questions 8A and
8B for an explanation of monthly average. The credit amount depends, in part, on the
county in which the taxpayer is located and the amount of gross wages paid to each
employee. New jobs paid gross wages at or above 120% of the county or State average
per capita income, whichever is less, are eligible for 100% of the “traditional” credit
amount. New jobs paid gross wages below 120% of the county or State average per
capita income, whichever is less, are eligible for 50% of the “traditional” credit amount.
See Question 16 and Examples D and E. (Note: A minimum monthly average of 2 new,
full time jobs must be created paying gross wages in the “at or above” 120% wage
threshold for the tax year to receive the 100% credit amount.) The credit is claimed on
the taxpayer’s tax return for 5 years (Years 2 through 6) beginning in the year following
the year of the creation of the new jobs (Year 1), provided the jobs are maintained. The
credit is claimed on Form TC-4SB. (Note: The earliest this credit may be claimed is on
the 2007 tax return for jobs created in tax years beginning on January 1, 2006.)
Code Section 12-6-3362 - “Monthly” small business job tax credit (Alternative Method).
For tax years beginning on or after January 1, 2006, Code Section 12-6-3362 allows a
small business qualifying for the “annual” small business job tax credit in Code Section
12-6-3360(C)(2), an “election” to accelerate the use of the credit by computing it on a
“monthly” basis and claiming the credit in the year the jobs are created. The credit
amount depends, in part, on the county in which the taxpayer is located and the amount of
2

gross wages paid for a full month to each employee. New jobs for which gross wages are
paid for the full month at or above 120% of the county or State average per capita
income, whichever is less, are eligible for 100% of the “traditional” credit amount (prorated) for each qualifying month. New jobs for which gross wages are paid for a full
month below 120% of the county or State average per capita income, whichever is less,
are eligible for 50% of the “traditional” credit amount (pro-rated) for each qualifying
month. See Question 16 and Examples F and G. (Note: A minimum monthly average of
2 new, full time jobs must be created for the tax year paying gross wages for the full
month in the “at or above” 120% wage threshold and there must be an increase of 2 or
more jobs in the month in the “at or above” 120% wage threshold for the new jobs to
qualify for the pro-rated 100% credit amount for that month.) The total credit for the year
is limited to the maximum applicable annual credit. (See Question 16.) The credit is
allowed for the monthly average of new, full time jobs for which wages are paid for the
full month. The credit is claimed on the taxpayer’s tax return for not more than 60
consecutive months and is claimed beginning with the first full month wages are paid for
the new, full time jobs created. The credit is claimed on Form TC-4SM.
The purpose of this advisory opinion is to provide small businesses that may now be
eligible for the credit for the first time a general overview of the credit requirements, an
explanation of the “annual” and the “monthly” small business job tax credits, and
examples of their computation.
Caveat: This advisory opinion is limited to the basic credit principles contained in Code
Sections 12-6-3360(C)(2) and 12-6-3362. A small business taxpayer may qualify for the
“traditional” annual job tax credit; guidance on this credit method is contained in Code
Section 12-6-3360(C)(1) and SC Revenue Ruling #99-5. Note: Although the taxpayer
may meet the requirements of all three of the credit provisions, only one credit provision
may be used for each credit period. (See Questions 27 and 32.) The job tax credit statute
rules and requirements can be complex. For additional guidance on more complex
principles and exceptions to the general rules discussed in this advisory opinion, see Code
Sections 12-6-3360 and 12-6-3362, the job tax credit statutes, SC Revenue Ruling #99-5,
a comprehensive question and answer advisory opinion regarding the credit as the statute
existed after a substantial amendment in 1996, and consult your tax advisor.

CONTENTS OF ADVISORY OPINION:
For ease of reading, this question and answer document is divided into the following
categories:
● A. Qualifying Taxpayers
Question 1 – Examples of Qualifying Taxpayers (summary chart)
Question 2 – Definitions of Types of Taxpayers
Question 3 – A “Small Business” With 99 or Fewer Total Employees Worldwide
● B. Types of Qualifying New Jobs
Question 4 – Definitions of “Full Time” and “New Job”
Question 5 – Half Time Jobs (Determining Full Time Equivalents)
Question 6 – Transferred Jobs
Question 7 – Leased Employees
3

● C. Determining the Monthly Average
Question 8A – Monthly Average Number of New Jobs Required for the Tax Year –
General Rule
Example A1 – Calculation of Monthly Average of Full Time Employees – Basic
Concept
Question 8B – Monthly Average Number of New Jobs Required for the Tax Year –
Additional Rule
Example A2 – Calculation of “Combined” Monthly Average Increase for the Tax
Year for Taxpayer Paying Wages in Both Categories
Question 9 – Computing Monthly Average if Year 1 in Operation is Less Than 12
Months
Question 10 – Definition of “Base Year”
● D. Jobs Qualifying for Credit Each Month in Tax Year (Monthly Credit Only)
Question 11 – Computing the Number of Qualifying Jobs Eligible for the Monthly
Credit
Example B1 – Calculation of Eligible Jobs Paid Gross Wages for the Full Month
for Taxpayers Having Only One Wage Threshold
Example B2 – Calculation of Eligible Jobs Paid Gross Wages for the Full Month
in Both Wage Thresholds (Illustrates job adjustments for fractional jobs and jobs
less than 2 in a month in the ≥ 120% threshold.)
Example B3 – Calculation of Eligible Jobs Paid Gross Wages for the Full Month
in Both Wage Thresholds when Monthly Average is Less than 2 for Tax Year in ≥
120% Threshold (and necessary job adjustments.)
Example B4 – Calculation of Eligible Jobs Paid Gross Wages for the Full Month in
Both Wage Thresholds with Job Decreases in Some Months in Both Categories
(and necessary job adjustments.)
● E. County Rankings
Question 12 – Annual County Designations
Question 13 – Annual County Ranking List
Question 14 – County Ranking Changes in Years 2 through 6 (or during the 60
consecutive month period) and Credit Amount for New Jobs in the Original Credit
Period
Question 15 – County Ranking Changes from Year 1 and Credit Amount for
Additional New Jobs
● F. Credit Amount
Question 16 – 100% “Basic” Credit Amount and 50% “Basic” Credit Amount
Question 17 – “Additional” Credit Amount
Question 18 – Limitation on Credit Amount and Maximum Applicable Credit
● G. 120% “Gross Wages” Rules
Question 19 – Definition of “Gross Wages”
Question 20 – Affect of Gross Wages Paid on the Credit Amount
Example C1 – Full Time Jobs – Basic Concepts of Combining Wage Thresholds
– Annual Small Business Job Tax Credit
4

Example C2 – Half Time Jobs – Basic Concepts of Combining Wage Thresholds
– Annual Small Business Job Tax Credit
Question 21 – Calculation of Gross Wages of 120% County or State Average Per
Capita Income for Full Time Jobs
Question 22 – Calculation of Gross Wages of 120% County or State Average Per
Capita Income for Half Time Jobs
Question 23 – When is the Computation Made to Determine Whether Gross Wages
Paid Meet the 120% Wage Threshold
● H. Per Capita Income Requirements
Question 24 – County Average Per Capita Income
Question 25 – State Average Per Capita Income
Question 26 – Per Capita Figures to Use in Computing 120% Threshold
● I. Determining and Claiming the Credit
Question 27 – Years (Months) Credit is Claimed
Question 28 – Credit Form to File
Question 29 – Claiming Credit When $0 Tax Liability
Question 30 – Income Tax Limitations of Credit
● J. Computing the Credit and Carryforwards
Question 31 – Determining the Number of New Jobs
Question 32 – Credit for Additional New Jobs
Question 33 – Credit Reduced if Employment Falls
Question 34 – Carryforward Period
● Additional Examples – CAVEAT: These examples are intended to illustrate
concepts explained throughout this advisory opinion. The examples use
shorthand terminology and are based on certain assumptions (e.g., number of
jobs in each month of base year, the 100% or 50% credit amount for monthly
credit purposes is pro-rated, etc.). Accordingly, all examples should be used in
conjunction with the entire advisory opinion.
Example D – “Annual” Job Tax Credit – Calculation for Year 1 and Year 2. A
simplified example showing the use of the 120% wage threshold to calculate the
credit amount for full time and half time jobs and the average increase in employees
eligible for the 100% credit amount and the 50% credit amount.
Example E – “Annual” Job Tax Credit – Calculation of Credit for 5 Year Credit
Period. This example illustrates the credit for new jobs created in 2006 and paying all
gross wages > 120% wage threshold.
Example F – “Monthly” Credit Calculation for Qualifying Months in Year 1. This
example uses the same number of jobs as shown in Example D for the annual credit
to illustrate the computational differences between the annual and monthly credits.
Example G – “Monthly” Credit Calculation for Qualifying Months in Year 1. This
example illustrates the monthly computation for a taxpayer having a base year > 0
and a job decrease in a wage category for the year.
● Appendix
Comparison of the “Traditional,” “Annual,” and “Monthly” Job Tax Credit Statutes
5

A. QUALIFYING TAXPAYERS
Question 1 – Examples of Qualifying Taxpayers
Q. What types of small businesses with 99 or fewer total employees at all locations may be
eligible to qualify for the credit?
A. The following chart summarizes the types of small businesses that may be eligible to
qualify for the credit and the number of new, full time jobs that must be created by
the business in a particular South Carolina county.
Qualifying Facility

County Ranking

Yes

Under Developed,
Moderately
Developed,
& Developed
No

Yes

Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes

Qualifying Service Related Facility*
Note: Legal, accounting, banking,
investment services, and retail sales
are not a qualifying service related
facility.

Yes

(see below)

2
2
2
2
2
2
2
2
2, except 20 for a new
hotel or motel
2

Qualifying Service Related Facility*
Note: Legal, accounting, banking,
investment services, and retail sales
are not a qualifying service related
facility.

(see above)

Yes

30 – 250 at a single
location based on
certain average cash
compensation amounts
listed in the statute

Qualifying health care related
facilities in NAICS Manual Section
62, subsectors 621 (ambulatory
health care), 622 (hospitals), and
623 (residential care facilities.)*

Yes

Retail Facility (e.g., a convenience
store, restaurant)
Service Related Industry (e.g., a
seamstress, barber, lawn care
service, daycare)
Manufacturing
Processing
Warehousing
Distribution
Research & Development
Corporate Office
Technology Intensive
Banking (effective 6/6/06)
Tourism

Distressed

Least
Developed

Yes

Monthly Average Job
Requirement**

See Question 2 for definitions of certain types of “facilities.”
*CAVEAT: For illustrative purposes only, the number of new, full time jobs required
to be created is referred to as “2” for the new small business job tax credits (or “10” for
the “traditional” job tax credit) throughout this advisory opinion. Exceptions to this
general rule are noted for certain “tourism” and “qualifying service related facilities.”
6

Question 2 – Definitions of Types of Taxpayers
Q. Are the qualifying small business facilities listed in Question 1 defined?
A. Yes. The facilities marked with an asterisk in Question 1 are defined in Code Section
12-6-3360(M). Code Section 12-6-3360 and Regulation 117-750.1 defining the term
“facility” can be found on the Department’s website at www.sctax.org.
Question 3 – A “Small Business” With 99 or Fewer Total Employees Worldwide
Q. When does the taxpayer determine if it has 99 or fewer employees?
A. To qualify for the new provisions available for a small business, the taxpayer has the
option to determine whether it has 99 or fewer total employees at all locations
worldwide at either the beginning or the end of its tax year in which the new, full time
jobs are created in Year 1. The determination is made each time a credit period
begins; it is not made for subsequent years of the same credit period (e.g., Year 2, 3,
4, or 5), even if the number of employees may exceed 99 worldwide during the credit
period.
A taxpayer with 99 or fewer total employees worldwide must create a monthly
average of at least 2 new, full time jobs to qualify for the credit allowed under Code
Sections 12-6-3360(C)(2) or 12-6-3362. Note: A taxpayer, regardless of size, creating
at least a monthly average of 10 new, full time jobs may qualify for the “traditional”
annual credit allowed under Code Section 12-6-3360(C)(1).

B. TYPES OF QUALIFYING NEW JOBS
Question 4 – Definitions of “Full Time” and “New Job”
Q. What is a qualifying new, full time job?
A. A “full time” job is one requiring a minimum of 35 hours of an employee’s time each
week for the entire normal year of company operations. A “new job” is a job created
in the State at the time a new facility or an expansion is initially staffed. See SC
Revenue Ruling #05-5 for more information on the meaning of the term “expansion.”
Question 5 – Half Time Jobs (Determining Full Time Equivalents)
Q. Is a half time job a qualifying new job?
A. Two half time jobs requiring a minimum of 20 hours of each employee’s time a week
qualify as one “full time” job. To determine the qualifying number of jobs, half time
jobs must be converted into “full time equivalents” of half time jobs. For example, 1
half time job qualifies as 0.5 “full time equivalent,” 3 half time jobs qualify as 1.5
“full time equivalents,” and 4 half time jobs qualify as 2 “full time equivalents” of
half time jobs. See SC Revenue Ruling #99-5 - Question 10, and the “Additional
Examples” section at the end of this advisory opinion for additional information on
7

computing the number of “full time equivalents” of half time jobs and the monthly
average.
Question 6 - Transferred Jobs
Q. Do jobs transferred from another facility or related party qualify as new jobs?
A. A new job does not include a job created when an employee is shifted from an
existing location in South Carolina to a new or expanded facility whether the job is
transferred to or from another facility of the taxpayer or to or from a related party’s
facility. See SC Revenue Ruling #99-5 - Question 8 for limited exceptions to this
general rule.
Question 7 - Leased Employees
Q. Do leased employees qualify as new jobs?
A. Leased employees or other employees of another company, such as a temporary
employment agency or professional employer organization, who are working for a
qualifying taxpayer, such as a trucking company, do not qualify for the job tax credit.
Only employees of the taxpayer qualify for the credit (i.e., employees subject to
withholding by the qualifying taxpayer.) If, however, the trucking company in this
example subsequently hires full time employees who were previously leased or
temporary employees at the business, then they are considered new employees
eligible for the job tax credit, if all other statutory requirements are met.

C. DETERMINING THE MONTHLY AVERAGE
Question 8A – Monthly Average Number of New Jobs Required for the Tax Year –
General Rule
Q. How is the “monthly average” number of new jobs for the tax year determined?
A. Annual Small Business Job Tax Credit – General Rule. Code Section 12-63360(C)(2) requires that a monthly average increase of 2 jobs or more for the tax year
be created and maintained in the applicable county for the small business to qualify
for the credit. The credit is not earned when a total of 2 jobs are created by the end of
a tax year or when a total of 2 jobs are created over several years. (Note: A minimum
monthly average of 2 new, full time jobs for the tax year must be created paying gross
wages in the “at or above” category for a taxpayer to be eligible for the 100% credit
amount; see Question 20.) Example A1 below provides basic illustrations of the
monthly average computation for a taxpayer who pays wages in only one wage
threshold category.
The periods to compute the monthly average are the months that correspond to the tax
year of the taxpayer; a taxpayer may not choose any other 12 month period. The total
number of employees in each month of the tax year is the cumulative total of full time
employees in each county for each month; it is not the number of new jobs created in
8

each month. The monthly average calculated is reduced by the previous years’
monthly average to determine the average increase (decrease) for the current tax year.
Note: When computing the increase in full time employees each year, the taxpayer
must round down to the nearest whole number of jobs.
Monthly Small Business Job Tax Credit – General Rule. Code Section 12-6-3362
requires that a monthly average increase of 2 jobs or more for the tax year be created
in the applicable county for the small business to qualify for the credit. The credit is
not earned when a total of 2 jobs are created by the end of a tax year or when a total
of 2 jobs are created over several years. (Note: In order to qualify for the 100%
credit amount (pro-rated), a minimum monthly average of 2 new, full time jobs for
the tax year must be created paying gross wages for the full month in the “at or
above” 120% wage threshold, and there must be 2 or more new, full time jobs for
each month the pro-rated 100% credit is claimed; see Question 20.) Example A1
below provides basic illustrations of the monthly average computation for a taxpayer
who pays wages in only one wage threshold category.
The periods to compute the monthly average are the months that correspond to the tax
year of the taxpayer; a taxpayer may not choose any other 12 month period. The total
number of employees in each month of the tax year is the cumulative total of full time
employees in each county paid for a full month for each month; it is not the number
of new jobs created in each month. This amount is reduced by the base year monthly
average to determine the monthly average increase (or decrease) for the current tax
year. Note: When computing the increase in full time employees each year, the
taxpayer must round down to the nearest whole number of jobs.

EXAMPLE A1 – Calculation of Monthly Average of Full Time Employees – Basic Concept
This example illustrates the basic concept of “monthly average.” It assumes that each taxpayer is a calendar
year manufacturing facility with one location in South Carolina who pays all employees over 120% of the
county or State average per capita income, maintains all jobs in Year 2 (for annual small business job tax credit
purposes), and pays all employees wages for the full month (for monthly small business job tax credit
purposes.)
Taxpayer 1 –
New Business
Started 1/1/06

Taxpayer 2 –
New Business
Started 5/1/06

Taxpayer 3 –
Existing Business
Started 7/1/05

MONTHS IN YEAR 1
(e.g., 2006)

CUMULATIVE
TOTAL OF
EMPLOYEES*

January

1 (hired 1)

February

2 (hired1)

March

April

6 (hired 1)

May

2 (hired 2)

7 (hired 1)

June

3 (hired 1)

July

August

September

8 (hired 1)

October

5 (hired 2)

November

9 (hired 1)

December

*TOTAL EMPLOYEES (i.e., For annual
purposes, it is the cumulative total of full time
employees in each county for each month
(number of employees in January plus number in
February, etc.) (For monthly purposes, it is the
cumulative total of full time employees in each
county for each month paid wages for the full
month.) It is not the number of new jobs created
in each month.

Divided by Months in Operation

Monthly Average of Full Time Employees

1.92

3.625

6.92

Less: Base Year Monthly Average (e.g., 2005)

AVERAGE INCREASE IN FULL TIME
EMPLOYEES

1** (1.92 rounded
down)

3** (3.625 rounded
down)

1 ** (1.92 rounded
down)

QUALIFY FOR CREDIT

Yes

**Note: The increase in new, full time jobs is determined based on the Department’s longstanding
policy of rounding down to the nearest whole number.
10

Question 8B – Monthly Average Number of New Jobs Required for the Tax Year –
Additional Rule
Q.

What additional computation must be made to determine the monthly average number of
jobs for the tax year if a taxpayer pays wages in both the “at or above” and the “below”
120% wage threshold categories?

Question 8A provides the general rule for determining the monthly average number of new
jobs for the tax year. Since the small business job tax credit amount depends on wages paid
in the “at or above” 120% wage threshold (i.e., the 100% credit) or the “below” 120%
wage threshold (i.e., the 50% credit), the monthly average is determined separately for each
wage threshold and then an additional computation is required to determine the
“combined” increase or decrease for the two wage threshold categories. The combined total
amount determines whether the required 2 job minimum increase for the tax year is met for
the taxpayer to qualify for the small business job tax credit. The additional computation is
described and illustrated below.
Annual Small Business Job Tax Credit – Additional Monthly Average Calculation for
Taxpayer Paying Wages in Both Wage Categories. Unlike the traditional job tax credit,
the annual and monthly small business job tax credit amount depends upon the monthly
average number of new, full time jobs in the “at or above” 120% wage threshold and in the
“below” 120% wage threshold. As a result, the monthly average increase (or decrease) for
the tax year computation for the “annual” and “monthly” small business job tax credit is
computed separately for each pay threshold and then combined to determine the total
monthly average increase for the tax year. This computation is a 3 step process and is briefly
described below.

Monthly Average Calculation for Employees Paid in the “At or Above” 120% Wage
Threshold for the Full Month, if applicable. Determine the monthly average increase
(or decrease) for the tax year for employees paid gross wages in the “at or above” 120%
wage threshold, using the rounding methods and applicable job adjustments discussed
in this advisory opinion (e.g., a fractional job resulting in the computation of the
monthly average of new jobs in the “at or above” 120% wage threshold due to rounding
down the average to the whole number may be added to the monthly average of new
jobs in the “below” 120% wage threshold.) See also Question 20.
Monthly Average Calculation for Employees Paid in the “Below” 120% Wage
Threshold for the Full Month, if applicable. Determine the monthly average increase
(or decrease) for the tax year for employees paid gross wages in the “below” 120%
wage threshold, using the rounding methods and applicable job adjustments discussed
in this advisory opinion (e.g., a fractional job moved from the computation of the
monthly average of new jobs in the “at or above” 120% wage threshold due to rounding
down to the whole number may be added to the monthly average of new jobs in the
“below” 120% wage threshold prior to it being rounded to the whole number.) See also
Question 20. Note: An adjustment for rounding a fractional job is not allowed from the
“below” 120% wage threshold up to the “at or above” 120% wage threshold.

3. Combined Monthly Average Increase (Decrease) in New Jobs. The separate monthly
average increases and/or decreases of full time new jobs in the “at or above” and the
“below” 120% wage thresholds are added or subtracted, as applicable, to determine the
“combined” monthly average increase for the tax year. A combined increase of 2 or
more new, full time jobs for the tax year is required for the taxpayer to be eligible for
the small business job tax credit. Example A2 below provides simple illustrations of
this computation.
Monthly Small Business Job Tax Credit – Additional Monthly Average Calculation
for Taxpayer Paying Wages in Both Wage Categories. The monthly average increase for
the tax year computation discussed above for the “annual” small business job tax credit
also applies to the “monthly” small business job tax credit, except that the total number of
employees for each month of the tax year is the cumulative total of full time employees in
each county paid for the full month; it is not the number of new jobs created in each month.
EXAMPLE A2 – Calculation of “Combined” Monthly Average Increase for the Tax
Year for Taxpayer Paying Wages in Both Categories – Annual or Monthly Credit
Monthly Average Increase
(Decrease) for Tax Year in

120% Wage Threshold
Monthly Average Increase
(Decrease) for Tax Year in
< 120% Wage Threshold
Combined Monthly
Average Increase
(Decrease) for Tax Year
Meet Monthly Average
Requirement for Tax Year?

Taxpayer 1
2

Taxpayer 2
(5)

Taxpayer 3
7.375 Round
down to 7

Taxpayer 4
7

Taxpayer 5
1

(3)

2.83 Rounded
down to 2

(1)

2.83 + .375 from
above = 3.208
Rounded down
to 3
10 (7 + 3)

9 (7 + 2)

Yes, only for
5 jobs in <
120% wage
threshold
(50% credit)*

Yes

7 > 120% wage
threshold (100%
credit)
3 < 120% wage
threshold (50%
credit)*

7 > 120%
wage
threshold
(100% credit)
2 < 120%
wage
threshold
(50% credit)*

Yes, for 2 jobs
in < 120% wage
threshold or
50% credit; to
qualify for the
100% credit, a
monthly average
of 2 or more
jobs must be
created in the >
120% wage
threshold

*Reminder: For monthly small business job tax credit purposes, the 100% or 50% credit amount referred to in this
example must be pro-rated on a monthly basis. See Question 16.

Question 9 – Computing Monthly Average if Year 1 in Operation is Less Than 12 Months
Q. How is the monthly average number of new jobs computed if a taxpayer’s first year in
operation is not a full 12 months?
A. The taxpayer has the option of computing the monthly average in the first year of operation
by either dividing the appropriate total number of employees for Year 1 on the job tax credit
form by (a) 12 months or (b) the actual number of months in operation. See SC Revenue
Ruling #99-5 - Question 5 for more information.
Question 10 – Definition of “Base Year”
Q. What is the base year used to compute the average increase in full time employees?
A. Annual Small Business Tax Credit. The base year is the year preceding the first year a
taxpayer creates the number of new jobs necessary to qualify for the job tax credit, regardless
of whether that year was the first year of operation of the facility. In order to properly
determine the monthly average increase in a wage category, a taxpayer who has jobs in the
“base” year (i.e., the base year is not 0) must categorize each base year job in the “at or
above” 120% wage threshold or in the “below” 120% wage threshold. Reminder: The base
year is used to compute the Year 1 increase only.
Monthly Small Business Tax Credit. Same as the “annual” small business job tax credit,
except that each month of the base year includes only the cumulative number of employees
that are paid wages for the full month. Reminder: This same base year amount is used each
year during the original credit period in calculating the monthly average increase in new, full
time jobs for the tax year.

D. JOBS QUALIFYING FOR CREDIT EACH MONTH IN TAX YEAR
Question 11 – Computing the Number of Qualifying Jobs Eligible for the Monthly Credit
Q. How is the number of jobs that qualify for the credit each month determined?
A. To determine the number of jobs that are eligible each month for the credit, a taxpayer must
first determine if the “combined” monthly average increase in jobs for the tax year of at least
2 is met (see Question 8). If so, then the number of jobs that qualify for the credit each month
must be determined. If applicable, “job adjustments” are made to determine the adjusted
number of jobs qualifying for the 100% credit and the 50% credit (pro-rated). This process is
described below.
Annual Small Business Job Tax Credit. This computation is not applicable.
Monthly Small Business Job Tax Credit. Code Section 12-6-3362 provides that a credit is
not allowed for any month in which the new employment increase falls below the minimum
level of 2. Since the credit is based on the wages paid, the process can be a 1 or 2 step
process for each month and may require an adjustment for certain jobs (see explanation
below.)
The monthly 2 step process is:
Step 1 - Applies to small businesses with jobs with gross wages paid in the “at or above”
120% wage threshold for the full month.
Step 2 - Applies to small businesses with jobs with gross wages paid in the “below” 120%
wage threshold for the full month.
The examples below illustrate the computation of the number of jobs that qualify for the
credit each month. Example B1 illustrates the computation for two taxpayers paying wages
for the full month in only one wage threshold category. Example B2 illustrates the
computation for a taxpayer paying wages for the full month in both wage threshold
categories, along with some necessary adjustments. Example B3 illustrates the computation
and some necessary job adjustments when the monthly average increase is less than 2 for the
tax year in the “at or above” 120% wage category. Example B4 illustrates the computation
and some necessary job adjustments when there are job decreases in some months in both
wage categories.
Job Adjustments. General rules to remember concerning “adjustments” of jobs for purposes
of determining the “adjusted” number of qualifying jobs eligible for the monthly credit are:

Fractions of Jobs. A fractional job [0.5] resulting from a “full time equivalent” of half
time jobs is adjusted from the “at or above” 120% wage threshold and added to the
“below” 120% wage threshold for each applicable month to determine the “adjusted”
total increase in jobs. Fractions of jobs remaining in the “below” 120% threshold are
rounded down to the nearest whole number.

2. Monthly Average Increase for the Tax Year in the “At or Above” 120% Threshold < 2 or
Negative. When the monthly average increase for the tax year in the “at or above”
threshold is less than 2 or is negative, all jobs, regardless of the actual number of full time
jobs paid for the full month, for all months in the “at or above” 120% wage threshold are
adjusted by moving them down to the “below” 120% wage threshold. If the amount is an
increase, the adjustment of jobs “ineligible” for the 100% credit amount allows the
taxpayer the possible eligibility of these jobs for the 50% credit amount (pro-rated) by
adding them to the “below” 120% jobs.

Monthly Average Increase for the Tax Year in the “At or Above” 120% Threshold ≥ 2,
but the Increase in Jobs in this Category for the Month < 2. This adjustment applies to a
taxpayer who meets the monthly average increase of 2 jobs for the tax year requirement
in the “at or above” wage category, but does not meet the monthly requirement (i.e., there
are some months that do not have an increase of 2 jobs). In such instances, the amount
less than 2 for a month [1.5, 1.0, 0.5] must be adjusted by moving them down to the
“below” 120% wage category (e.g., March moves to March, June to June, etc.).
Monthly Average Increase or Decrease for the Tax Year in the “Below” 120% Wage
Threshold. An adjustment is made when there is a monthly average decrease for the tax
year in the “below” 120% wage category. This decrease for the tax year offsets any job
increase in the “at or above” 120% wage category monthly average tax year amount. An
increase in the “below” 120% threshold is not moved up to the “at or above” threshold.
Job Decrease in a Month in Either Wage Category. Any month that has a decrease in jobs
is adjusted. If the decrease is in the “at or above” 120% wage category, the adjustment
moves the job decrease down to offset the job increase in the “below” 120% wage
category. Likewise, if the decrease is in the “below” 120% wage category, the adjustment
moves the job decrease up to offset the job increase in the “at or above” 120% wage
category.
Example B1 – Calculation of Eligible Jobs Paid Gross Wages for the Full Month for Taxpayers Having Only One
Wage Threshold (Although not illustrated, the taxpayers meet the monthly average tax year requirement.)
TAXPAYER 1
TAXPAYER 2
Months in
Total Increase in Jobs in Do Jobs Qualify for Monthly Total Increase in Jobs in Do Jobs Qualify for Monthly
Tax Year
Tax Year Paid for Full
Credit?
Tax Year Paid for Full
Credit?
Month in ≥ 120% wage
Month in ≥ 120% wage
category)
category)
(e.g., Total jobs in tax
(e.g., Total jobs in tax
year less base year of 0
year less base year of 0
in this example)
in this example)
January
2
Yes (month increase ≥ 2)
1
No (month increase < 2)
February
2
Yes
1
No
March
3
Yes
1
No
April
1.5 (round to 1)
No (month increase < 2)
1
No
May
1.5 (round to 1)
No
1
No
June
1.5 (round to 1)
No
1
No
July
1.5 (round to 1)
No
2
Yes (month increase ≥ 2)
August
1.5 (round to 1)
No
3
Yes
September
1.5 (round to 1)
No
4
Yes
October
1.5 (round to 1)
No
3.5 (round to 3)
Yes
November
2.5 (round to 2)
Yes
4
Yes
December
4
Yes
5
Yes
Taxpayer 1. This example illustrates that the required increase of 2 for each month in the tax year is met only in the months of January, February,
March, November, and December. Any fractional job is rounded down to the nearest whole number each applicable month (see April –
November.) The taxpayer is eligible for the monthly small business job tax credit for the 5 months indicated with a “Yes.”
Taxpayer 2. This example illustrates that the required increase of 2 for each month in the tax year is met only in the months of July - December.
Any fractional job is rounded down to the nearest whole number each applicable month (see October.) The taxpayer is eligible for the monthly
small business job tax credit for the 6 months indicated with a “Yes.”

This example illustrates certain job adjustments (i.e., fractional jobs and increases in jobs in “at or above” category
for the month less than 2) for a taxpayer paying wages for a full month in both wage categories.
Example B2 - Step 1: Calculation of Eligible Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month
Months in Tax A. Full
B. Full Time C. Total Increase in Jobs
D. Job Adjustment,
E. Adjusted
Year
Time Jobs
Equivalent
in Tax Year Paid for Full
as applicable
Total Increase
in Tax
of Half Time Month in > 120% wage
in Jobs
category) (e.g., Total jobs
Year Paid
Jobs in Tax
(Move down to the
for Full
Year Paid
in tax year less base year
“below” 120% wage
Column C –
Month
for Full
of 0 in this example)
threshold)
Column D
Month
(Column A + Column B)
January
2
0
2
2
February
2
0
2
2
March
3
0
3
3
April
0
0.5
0.5
0.5 (move below)
0
May
1
0.5
1.5
1.5 (move below) 0
June
1
0.5
1.5
1.5 (move below)
0
July
1
0.5
1.5
1.5 (move below)
0
August
1
0.5
1.5
1.5 (move below)
0
September
1
0.5
1.5
1.5 (move below)
0
October
1
0.5
1.5
1.5 (move below)
0
November
2
0.5
2.5***
0.5 (move below)
2
December
4
1
5
5
2 = 24÷12
Monthly Average for Tax Year is Met

Number of
Qualifying Jobs
Eligible for the
100% Credit
Amount (prorated)
2
2
3
0*
0
0
0
0
0
0
2
5

Example B2 - Step 2: Calculation of Eligible Jobs Paid Gross Wages < 120% Threshold for the Full Month
D. Job Adjustment,
E. Adjusted
Number of
Months in Tax A. Full
B. Full
C. Total Increase in Jobs
as applicable
Total Increase Qualifying Jobs
Year
Time Jobs
Time
in Tax Year Paid for Full
in Jobs
Eligible for the
in Tax Year
Equivalent
Month in < 120% wage
(Moved from the “at
50% Credit
Paid for Full of Half
category) (e.g., Total jobs
or above” 120%
Month
Time Jobs
in tax year less base year
Amount (proColumn C +
wage threshold)
rated)
in Tax Year of 0 in this example)
Column D
(Column A + Column B)
(Rounded Down
Paid for
Full Month
to Whole Number)
January
0
0.5
0.5
0.5
0
February
0
0.5
0.5
0.5
0
March
0
1
1
1
1
April
0
1
1
0.5 from above
1.5
0 **
May
0
1.5
1.5
1.5 from above
3
3
June
1
1.5
2.5
1.5 from above
4
4
July
1
1
2
1.5 from above
3.5
3
August
1
2
3
1.5 from above
4.5
4
September
1
2.5
3.5
1.5 from above
5
5
October
1
2.5
3.5
1.5 from above
5
5
November
1
1.5
2.5
0.5 from above
3
3
December
3
1
4
4
4
2 = 25.5 ÷12 = 2.125
Monthly Average for Tax Year is Met
rounded
March. Since the required monthly average job increase of 2 is met in the “at or above” 120% wage threshold for March, the 1 job increase
in the “below” 120% wage category for March is considered separately and qualifies for the 50% credit amount.
**April. A minimum monthly average of 2 new, full time jobs must be created for the tax year paying gross wages “at or above”
the 120% wage threshold and there must be an increase of 2 or more jobs in the month in the “at or above” wage category to
qualify for the 100% credit amount (pro-rated). This requirement is met for the tax year, but not met for the month. Accordingly,
the 0.5 job is adjusted from the “at or above” wage category by moving it down to the “below” 120% wage threshold. The
taxpayer is not allowed credit for this job, since a job increase of 2 is not met in April in the “below” 120% wage threshold.
May – October. A minimum monthly average of 2 new, full time jobs must be created for the tax year paying gross wages “at or above”
the 120% wage threshold and there must be an increase of 2 or more jobs in the month in the “at or above” wage category to qualify for the
100% credit amount (pro-rated). This requirement is met for the tax year, but not met for the months of May – October (since these months
only have an increase of 1.5 new, full time jobs, the jobs do not qualify for the 100% credit.) These jobs not qualifying for the 100% credit are
adjusted by moving them down to the “below” 120% wage threshold for possible qualification for the 50% credit amount. As a result of the
adjusted total of jobs meeting the 2 job requirement for each applicable month in the “below” 120% wage threshold, the taxpayer gets a 50%
credit amount for the jobs moved down to the “below” 120% wage threshold (after rounding.)
****November. A 0.5 fractional job resulting from a “full time equivalent” of a half time job must be rounded down to the nearest whole
number. It is adjusted from the “at or above” wage category only by moving it down to the “below” 120% wage threshold. The taxpayer is
allowed a 50% credit amount (pro-rated) for this job, since the increase of at least 2 jobs in the month is met for November.

This example illustrates the job adjustments necessary when the monthly average increase is less than 2 for the tax year in the
“at or above” 120% wage category.
Example B3 - Step 1: Calculation of Eligible Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month
D. Job Adjustment,
E. Adjusted
Months in Tax A. Full
B. Full Time C. Total Increase in Jobs
as applicable
Total Increase
Year
Time Jobs
Equivalent
in Tax Year Paid for Full
in Jobs
in Tax
of Half Time Month in > 120% wage
(Move down to the
category) (e.g., Total jobs
Year Paid
Jobs in Tax
“below” 120% wage
for Full
Year Paid
in tax year less base year
Column C –
of 0 in this example)
threshold if monthly
Month
for Full
Column D
(Column A + Column B)
average for tax year <
Month
2 jobs)
January
1
0
1
1 (move below)
0
February
2
0
2
2 (move below)
0
March
2
0
2
2 (move below)
0
April
2
0
2
2 (move below)
0
May
2
0
2
2 (move below)
0
June
2
0
2
2 (move below)
0
July
2
0
2
2 (move below)
0
August
2
0
2
2 (move below)
0
September
2
0
2
2 (move below)
0
October
2
0
2
2 (move below)
0
November
2
0
2
2 (move below)
0
December
2
0
2
2 (move below)
0
1 = 23÷12=1.92 rounded;
Monthly Average for Tax Year
1.92 moves below
Example B3 - Step 2: Calculation of Eligible Jobs Paid Gross Wages < 120% Threshold for the Full Month
Months in
A. Full
B. Full Time
C. Total Increase in Jobs
D. Job Adjustment,
E. Adjusted
Tax Year
Time Jobs
Equivalent of
in Tax Year Paid for Full
as applicable
Total Increase
in Tax Year Half Time
Month in < 120% wage
in Jobs
Paid for the Jobs in Tax
category) (e.g., Total jobs
(Moved from the “at
Full Month Year Paid for
in tax year less base year
or above” 120%
Column C +
Full Month
of 0 in this example)
wage threshold)
Column D
(Column A + Column B)
January
0
0
0
1 (from above)
1
February
0
0
0
2 (from above)
2
March
0
0
0
2 (from above)
2
April
0
0
0
2 (from above)
2
May
0
2
2
2 (from above)
4
June
0
3
3
2 (from above)
5
July
0
3
3
2 (from above)
5
August
0
3
3
2 (from above)
5
September
0
3
3
2 (from above)
5
October
0
5
5
2 (from above)
7
November
0
5
5
2 (from above)
7
December
0
5
5
2 (from above)
7
4 = 29 ÷12 = 2.41 +
Monthly Average for Tax Year
1.92 (from above) = 4.33
rounded

Number of
Qualifying Jobs
Eligible for the
100% Credit
Amount (prorated)
0
0
0
0
0
0
0
0
0
0
0
0

Number of
Qualifying Jobs
Eligible for the
50% Credit (prorated) Amount
(Rounded Down
to Whole Number)
0
2
2
2
4
5
5
5
5
7
7
7

Since the monthly average increase for the tax year in the ≥ 120% wage category is not 2 or more for the tax year (in this
example the monthly average for the tax year in the ≥ 120% wage category is 1.92 or 1 rounded to the nearest whole number),
the taxpayer does not qualify for the 100% credit amount for any month. Accordingly, all jobs for every month in the tax year
created in the ≥ 120% wage category must be moved down to the < 120% wage category.
NOTE: See Example F for an illustration of job adjustments necessary when there is a decrease in the monthly average for the
tax year in one wage category.

This example illustrates the job adjustments necessary for job decreases in some months in both wage categories.
NOTE: The job adjustment column (Column D) is divided into 2 columns to show the adjustments from the “at or above”
category to the “below” category in Column D.1 and the adjustments from the “below” category to the “at or above” category
in Column D.2. Reminder – subtracting a negative number is the same as adding a positive number, e.g., (1) minus (1) = 0. A
negative number is noted in this advisory opinion in parenthesis, e.g., (1) means negative 1.
Example B4 - Step 1: Calculation of Eligible Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month
Months
A. Full
B. Full
C. Total Increase (Decrease)
D. Job Adjustment, as
E. Adjusted
in Tax
Time
Time
applicable
in Jobs in Tax Year Paid for
Total Increase in
Year
Jobs in
Equivalent
Full Month in > 120% wage
Jobs
D.1. Move
D.2 Enter the
category) (i.e., Total jobs in
Tax Year of Half
down to the amounts moved
tax year less base year )
Paid for
Time Jobs
(Column C –
up from the <
Full
in Tax Year (Column A + Column B; not < 120%
Column D.1 +
wage
120% wage
illustrated in this example)
Month
Paid for
Column D.2 )
threshold
threshold)
Full Month
(See
Column C)
Jan.
Not
Illustrated
(1)
(1)
0
Feb.
Not
Illustrated
(1)
(1)
0
Mar.
Not
Illustrated
(2)
(2)
0
Apr.
Not
Illustrated
2
(3) from below
(1)
May
Not
Illustrated
2
2
June
Not
Illustrated
4
(2) from below
2
July
Not
Illustrated
4
4
Aug.
Not
Illustrated
6
6
Sept.
Not
Illustrated
6
6
Oct.
Not
Illustrated
7
7
Nov.
Not
Illustrated
8
(6) from below
2
Dec.
Not
Illustrated
8
8
3 = 43 ÷ 12 = 3.58 rounded
Monthly Average for Tax Year
(.58 moves below)
Example B4 - Step 2: Calculation of Eligible Jobs Paid Gross Wages < 120% Threshold for the Full Month
Months
A. Full
B. Full
C. Total Increase (Decrease)
D. Job Adjustment, as
E. Adjusted
in Tax
Time
Time
in Jobs in Tax Year Paid for
applicable from Column C
Total Increase
Year
Jobs in
Equivalent
Full Month in < 120% wage
in Jobs
D.1 Enter
D.2 Move up to
Tax Year of Half
category) (i.e., Total jobs in
amount
the ≥ 120% wage
Paid for
Time Jobs
tax year less base year)
(Column C +
moved
threshold
the Full
in Tax Year (Column A + Column B; not down from
Column D1 (See Column C)
Month
Paid for
illustrated in this example)
Column D2)
≥ 120%
Full Month
wage
threshold
Jan.
Not
Illustrated
2
(1) from
1
above
Feb.
Not
Illustrated
2
(1) from
1
above
Mar.
Not
Illustrated
2
(2) from
0
above
Apr.
Not
Illustrated
(3)
(3)
0
May
Not
Illustrated
2
2
June
Not
Illustrated
(2)
(2)
0
July
Not
Illustrated
7
7
Aug.
Not
Illustrated
7
7
Sept.
Not
Illustrated
7
7
Oct.
Not
Illustrated
1
1
Nov.
Not
Illustrated
(6)
(6)
0
Dec.
Not
Illustrated
5
5
2 = 24 ÷ 12 = 2 +
Monthly Average for Tax Year
.58 (from above) = 2.58
rounded

Number of
Qualifying
Jobs Eligible
for the
100% Credit
Amount (prorated)

0
0
0
0
2
2
4
6
6
7
2
8

Number of
Qualifying Jobs
Eligible for the
50% Credit
Amount (prorated)
(Rounded
Down to Whole
Number)
0
0
0
0
2
0
7
7
7
1
0
5

*January – March Job Decreases in ≥ 120% Wage Category. Job decreases for each month indicated are adjusted from the ≥ 120% wage category and moved
down to the < 120% wage category. This adjustment reduces the number of jobs eligible for the 50% credit amount by the job decreases moved down.
** April, June, and November Decreases in < 120% Wage Category. Job decreases for each month indicated are adjusted from the < 120% wage category and
moved up to the ≥ 120% wage category. This adjustment reduces the number of jobs eligible for the 100% credit amount by the job decreases moved up.

E. COUNTY RANKINGS
Question 12 – Annual County Designations
Q. How are the counties ranked?
A. Each of South Carolina’s 46 counties are ranked annually based in part on per capita income
and unemployment rate data received from the South Carolina Employment Security
Commission and Budget and Control Board. The rankings published reflect the final county
rankings for the year after making all adjustments to county designations required by statute.
The rankings are done in late December for the next tax year.
Question 13 – Annual County Ranking List
Q. What ranking list should be used to calculate the credit?
A. Each January, the Department publishes a list of the ranking of each county as “distressed,”
“least developed,” “under developed,” “moderately developed,” or “developed” to use for
calculating the credit amount for jobs created during that tax year. For example, the list
published in January 2006 contains the county rankings for new jobs created in tax years
which begin in 2006. See the Department’s website at www.sctax.org for the annual
rankings.
Question 14 – County Ranking Changes in Years 2 through 6 (or during the 60 consecutive
month period) and Credit Amount for New Jobs in the Original Credit Period
Q. What credit amount is a taxpayer eligible to claim on the tax return during the original credit
period (5 years for the annual job tax credit or 60 consecutive months for the monthly small
business job tax credit) if the county ranking changes from Year 1 (the year of new job
creation)?
A. The credit is based on the county ranking at the time the new jobs are created in Year 1. The
credit created in Year 1 that is claimed in Years 2 through 6 (or the years in the 60
consecutive month period) is not affected by any future reranking of the county in which the
taxpayer is located for the jobs created in Year 1. See SC Revenue Ruling #99-5 - Question
17 for additional information.
Question 15 – County Ranking Changes from Year 1 and Credit Amount for Additional
New Jobs
Q. What credit amount is a taxpayer eligible to claim for additional new jobs created in Years 2
through 6 (or the years in the 60 consecutive month period) if the county designation changes
from Year 1 (the year of the initial job increase)?
A. Generally, the credit amount for any number of additional new jobs created is based on the
county designation for the year the additional new jobs are created. See SC Revenue Ruling

99-5 - Question 18 for an exception if a Form SC 616 is filed to lock in a county

designation.
19

F. CREDIT AMOUNT
Question 16 – 100% “Basic” Credit Amount and 50% “Basic” Credit Amount
Q. What is the “basic” credit amount?
A. In general, the “basic” credit amount is $750 to $8,000 per year per qualifying job increase
depending, in part, on the county where the taxpayer is located and the amount of gross
wages paid to each new, full time employee.
Annual Small Business Job Tax Credit. The following chart illustrates the “basic” credit
amount for a qualifying taxpayer under Code Section 12-6-3360(C)(2) creating and
maintaining the required number of new, full time jobs, without regard to any “additional”
amounts for which a taxpayer may be eligible. (See Question 20 for an exception to the credit
amounts below for a taxpayer who creates the minimum of 2 new, full time jobs for the tax
year, but with one job paying “at or above” the 120% wage threshold and the other job
paying “below” the 120% wage threshold.) See Examples D and E for additional
illustrations.
County Designation
(Location of Taxpayer with 99
or Fewer Total Employees
Everywhere on the First or Last
Day of its Tax Year of
Qualifying Job Creation)
Distressed
Least Developed
Under Developed
Moderately Developed
Developed County

Gross Wages Per Job
Greater Than or Equal To
(> ) 120% County or State
Average Per Capita
Income, Whichever is Less
(i.e., the 100% Credit
Amount)
$8,000
$4,500
$3,500
$2,500
$1,500

Gross Wages Per Job
Less Than (< ) 120%
County or State
Average Per Capita
Income, Whichever is
Less (i.e., the 50%
Credit Amount)
$4,000
$2,250
$1,750
$1,250
$ 750

Monthly Small Business Job Tax Credit. For taxpayers qualifying for the job tax credit
under Code Section 12-6-3360(C)(2) that elect to use the monthly method under Code
Section 12-6-3362 to calculate and claim the job tax credit, the above annual credit amounts
are converted to pro-rated monthly amounts to arrive at “tentative” monthly credit amounts
for each wage threshold category.
The “tentative” monthly credit amount under Code Section 12-6-3362 is the applicable credit
amount above multiplied by 8.33% multiplied by the number of new, full time qualifying
jobs for which wages are paid for the full month. The total “tentative” monthly small
business job tax credit claimed under Code Section 12-6-3362 cannot exceed the “maximum
applicable annual credit.” The “maximum applicable annual credit” is the credit amount
determined on an “annual” basis under Code Section 12-6-3360(C)(2) (i.e., the combined
total monthly average increase (or decrease) for the tax year in new jobs multiplied by the
appropriate wage threshold credit amount.) See Examples F and G for additional illustrations.

Question 17 - “Additional” Credit Amount
Q. What is the “additional” credit amount?
A. Certain small business taxpayers may also be entitled to job tax credit amounts in addition to
the “basic” credit amounts listed above. These “additional” amounts are available to the
following qualifying taxpayers:

A small business located in a multi-county industrial park may be allowed an additional
$1,000 credit amount for each new job created. Two or more counties determine if an
area in the county is designated as a multi-county industrial park by entering into an
agreement under Code Section 4-1-170. This determination is not made by the
Department.
A small business that creates qualifying new, full time jobs on property where a response
action has been completed pursuant to a nonresponsible party voluntary cleanup contract
under Title 44, Chapter 56, Article 7 (the Brownfields Voluntary Cleanup Program) may
be allowed an additional $1,000 credit amount for each new job created. Taxpayers must
have a certification of completion from the South Carolina Department of Health and
Environmental Control.
Note: For simplicity, the examples used in this advisory opinion assume a taxpayer does not
qualify for any “additional” credit amounts. If a taxpayer qualified for one of the “additional”
credit amounts, the full $1,000 would be added to the “basic credit amount” (see Question 16)
regardless of the wage threshold (i.e., the additional credit is the full $1,000 even for jobs created
in the “below” 120% wage threshold.) See Code Sections 12-6-3360(E) and 12-6-3362 for the
time periods in which the “additional” credits may be claimed.
Question 18 – Limitation on Credit Amount and Maximum Applicable Credit
Q. Are there limitations on the job tax credit amount claimed?
A. Yes. The limitations include the following:
For Taxpayers Claiming Both the Job Tax Credit and the Credit for Hiring Family
Independence Recipients. The maximum credit amount that may be claimed for any tax
year for a single employee under the job tax credit statute and the “basic” part of the
family independence credit under South Carolina Code §12-6-3470(A) is $5,500. The
$5,500 limitation is not applicable to a taxpayer qualifying for the job tax credit in a
“distressed” county.
Tax Liability Limitation. As discussed in Question 30, the job tax credit taken in one tax
year may not exceed 50% of the taxpayer’s income tax, insurance premium tax, or bank
tax liability.
Monthly Small Business Job Tax Credit Limitations. As discussed in Question 16 and
illustrated in Examples F and G, the monthly small business job tax credit cannot exceed
the “maximum applicable annual credit” amount determined under the “annual” basis
under Code Section 12-6-3360(C)(2).
21

G. 120% “GROSS WAGES” RULES
Question 19 – Definition of “Gross Wages”
Q. How is the “gross wage” amount per job determined for purposes of calculating the 120%
county or State average per capita income requirement?
A. General Rule. Gross wages are wages subject to withholding (i.e., “net” wages after pre tax
benefits, such as pretax medical, dental, disability, retirement, 401(k) contributions, pretax
dependent care plan deduction, and pretax medical reimbursement plans deductions). See
Code Section 12-10-30(4). An example illustrates how gross wages are used to determine if
120% of the county or State average per capita income requirement is met and whether the
small business is eligible for the 100% credit amount or the 50% credit amount discussed in
Question 16.
For example, a new employee hired by a manufacturer in X County who is paid $20 per hour
gross or $41,600 per year elects pretax family medical and dental coverage of $100 per week
($5,200 per year), a $5,000 annual pre tax medical reimbursement, a $5,000 pretax dependent
care plan deduction, and a $4,000 401(k) contribution. This employee has “gross wages”
subject to withholding of $22,400 for purposes of the per capita computation.
Annual Small Business Job Tax Credit. For illustrative purposes, assume that as of
December 31, 2006, X County’s average per capita income is $28,005 and is less than the
State average per capita income; the $22,400 gross wage amount subject to withholding is
not 120% or more of the county or State average per capita income, and the new job would
be eligible for the 50% credit amount.
Monthly Small Business Job Tax Credit. Same as the annual small business job tax credit,
except the minimum gross wage requirement is met if the gross wages paid for the full
month, when annualized, meet the minimum requirement.
Question 20 – Affect of Gross Wages Paid on the Credit Amount
Q. How does the payment of gross wages “at or above” the 120% wage threshold or “below” the
120% wage threshold affect the credit amount for each job?
A. The 120% threshold is determined for each job at the end of the taxpayer’s tax year based on
data published by the Department. (See Section H below for more information on State and
county average per capita income amounts to use.) To determine the credit amount, a monthly
average number of full time jobs and full time equivalent of half time jobs with gross wages “at
or above” 120% of the per capita income threshold amount is determined and then a monthly
average number of full time jobs and full time equivalent of half time jobs with gross wages
“below” 120% of the per capita income threshold amount is determined. This separate
calculation is needed since the “monthly average” number of new jobs created is most often not
the same as the “actual” number of new jobs created. Then, the monthly average increase for the
wage thresholds are added or subtracted, as necessary, to determine the “combined” total
22

monthly average increase (or decrease) in new jobs for the tax year that is used to calculate the
credit amount.
The following general examples explain the affect gross wages paid have on the credit
amount. Caveat: The examples illustrate the annual small business job tax credit, however,
similar concepts also apply to the monthly small business job tax credit. See Question 11.
Note: A minimum monthly average of 2 new, full time jobs must be created paying gross
wages “at or above” 120% of the county or State average per capita income, whichever is
less, to receive the 100% credit amount. See Example C1 #4 below that illustrates the
adjustment of a 1 job increase for the tax year in the “at or above” 120% wage category to
the “below” 120% wage category with only a 1 job increase that allows the taxpayer to meet
the qualifying requirements in the “below” 120% wage category.

Example C1 - Full Time Jobs – Basic Concepts of Combining Wage Thresholds –
Annual Small Business Job Tax Credit
Simplified examples illustrate the affect of the 120% wage threshold on the credit amount for
each new, full time job. These examples assume the taxpayers illustrated below meet all the
statutory requirements of the credit in 2006, are located in a distressed county, and hire 3 new,
full time employees in Examples 1 and 5 on January 1, 2006, and 2 new, full time employees on
January 1, 2006, in Examples 2, 3, and 4, and all jobs are maintained in Years 2 – 6 for taxpayers
using the annual small business credit.

Monthly average increase of
each new, full time job paying
gross wages > 120%
100% credit amount for each
new, full time job paying gross
wages > 120%
Monthly average increase of
each new, full time job paying
gross wages < 120%
50% credit amount for each
new, full time job paying gross
wages < 120%
Total Credit for Monthly
Average Increase of All New,
Full Time Jobs (Line 2 + Line 4)

Example 1

Example 2

Example 3

Example 4

Example 5

2 x $8,000 =
$16,000

N/A

1 * (must move to
below 120% wage
category)
0* x $8,000 = $0

1 x $4,000 =
$4,000

N/A

2 x $4,000 =
$8,000

$20,000

$16,000

$8,000

2 x $4,000 =
$8,000
(Line 1 + Line 3)
$8,000

3 x $4,000 =
$12,000
(Line 1 + Line 3)
$12,000

Example 1 and Example 2 illustrate that the minimum monthly average 2 new job requirement
for the tax year is met in the “at or above” 120% wage threshold, thereby making these 2 new
jobs eligible for the 100% credit amount. Example 1 also illustrates that the wage threshold for
another job is looked at separately and the 1 other job in this example is eligible for the 50%
credit amount since it is paid at the “below” 120% wage threshold.
Example 3 illustrates that the minimum monthly average 2 new job requirement for the tax year
is met in the “below” 120% wage threshold, thereby making these 2 new jobs eligible for the
50% credit amount.
Examples 4 and 5 illustrate a minimum monthly average of 2 new, full time jobs must be created
for the tax year paying gross wages “at or above” 120% of the county or State average per capita
income, whichever is less, to receive the 100% credit amount. Example 4 illustrates that a small
business creating a monthly average of 2 new, full time jobs for the tax year paying one job in
the “at or above” 120% threshold and the other job in the “below” 120% threshold qualifies only
for the 50% credit amount for these 2 jobs since the 2 job monthly average minimum is not met
in the “at or above” wage threshold category. If these 2 jobs are maintained and an additional job
is created in a subsequent year, it will earn the 50% credit if it pays gross wages “below” 120%.
If an additional job is created paying gross wages “at or above” 120%, then it and the original
job paid “at or above” 120% qualify for the 100% credit. Example 5 illustrates the “adjustment”
of less than 2 jobs in the “at or above” 120% threshold to the “below” threshold since the 2 job
monthly average minimum for the tax year is not met in the “at or above” wage threshold. In this
example, the taxpayer qualifies for the 50% credit amount for 3 jobs.
24

Example C2 - Half Time Jobs - Basic Concepts of Combining Wage Thresholds –
Annual Small Business Job Tax Credit
Simplified examples illustrate the affect of the 120% threshold on the credit amount for half time jobs.
This example assumes the taxpayers illustrated below meet all the statutory requirements of the credit,
hire only half time employees in a distressed county on January 1, 2006, and maintain the jobs for
taxpayers using the annual small business credit. Reminder: Two half time jobs requiring at least 20 hours
of each employee’s time a week qualify as one “full time equivalent” job.
Example 1

Example 2

Example 3

Example 4

Example 5

Monthly average
increase of each
half time new job
paying gross wages

120%

2 half time
(1 full time
equivalent –
must move to
“below” 120%
wage category)

5 half time
(2 full time
equivalents, i.e.,
2.5 rounded
down – the .5 job
is moved down
and added to the
“below” 120%
wage category)*

3 half time
(1 full time
equivalent –
i.e., 1.5
rounded) down

100% credit
amount for each
new “full time” job
paying gross wages

120%
Monthly average
increase of each
half time new job
paying gross wages
< 120%

$0 x $8,000 =
$0

5 half time
(2 full time
equivalents, i.e.,
2.5 rounded down
to the nearest
whole number –
the .5 job is moved
down and added to
the “below” 120%
wage category)
2 x $8,000 =
$16,000

2 x $8,000 =
$16,000

2 half time
(1 full time
equivalent + 1
full time
equivalent from
above = 2)
2 x $4,000 =
$8,000

2 half time
(1 full time
equivalent + .5
equivalent rounded
from above = 1.5,
rounded to 1)
1 x $4,000 =
$4,000

3 half time
(1.5 full time
equivalents + .5
equivalent
rounded from
above = 2)
2 x $4,000 =
$8,000

4 half time
(2 full time
equivalents)

2 x $4,000 =
$8,000

$8,000

$20,000

$24,000

$8,000

50% credit
amount for each
new “full time” job
paying gross wages
< 120%
Total Credit for
Monthly Average
Increase of All
New, “Full Time
Equivalent” Jobs
(Line 2 + Line 4)

Example 1 illustrates hiring 1 “full time equivalent” (i.e., 2 half time jobs) paying in the “at or
above” 120% threshold and hiring 1 “full time equivalent” (i.e., 2 half time jobs) paying in the
“below” 120% threshold qualifies the taxpayer only for the 50% credit amount for these 2 “full
time equivalents” of half time jobs since the 2, new full time job minimum monthly average
requirement for the tax year is not met in the “at or above” 120% wage threshold category.
Example 2 illustrates that the minimum monthly average 2 new, full time jobs requirement for
the tax year is met in the “at or above” 120% wage threshold, thereby making these 2 new, full
time equivalent of half time jobs eligible for the 100% credit amount. It further illustrates that the
wage threshold for each job is looked at separately and the 1 full time equivalent of half time
jobs in this example is eligible for the 50% credit amount since it is “below” the 120% wage
threshold. (Note the rounding down to the whole number and the moving of any remaining
fraction to the “below” 120% wage threshold.) The 0.5 job in the “at or above” 120% wage
threshold is added to the number of jobs in the “below” 120% wage threshold, however it does
not affect the monthly average since the 1 full time equivalent job in the “below” 120% category
plus the 0.5 job moved down from the “at or above” 120% wage category is 1.5 and rounds
down to 1 full time equivalent.
*Example 3 illustrates that in computing the monthly average increase, the 8 half time jobs are
calculated as 4 “full time equivalent” jobs, after rounding. But first each half time job must be
classified in the “at or above” 120% wage threshold or “below” 120% threshold, then any
remaining fraction of a job is moved down to the monthly average computation for the “below”
120% wage threshold and rounded to the whole number (i.e., the 0.5 job in the “at or above”
120% amount is added to the number of jobs in the “below” 120% wage threshold, thereby
increasing the number of jobs in the monthly average computation for the “below” 120%
category from 1.5 to 2 full time equivalent jobs.)
Example 4 illustrates that the 3 half time jobs do not qualify for the credit since the minimum
monthly average requirement of 2 new, full time jobs for the tax year are not created.
Example 5 illustrates that the minimum 2 new, full time job monthly average requirement for the
tax year is met in the “below” 120% wage threshold, thereby making these 2 new, full time
equivalent jobs eligible for the 50% credit amount.
Note: Only rounding from the “at or above” 120% wage threshold may be moved to the “below”
120% wage threshold.

Question 21 – Calculation of Gross Wages of 120% County or State Average Per Capita
Income for Full Time Jobs
Q. How is the 120% wage threshold calculated?
A. Annual Small Business Job Tax Credit. To determine if the 120% wage threshold is met,
gross wages paid for each new job created in the tax year are annualized. For example,
assume a new job created in X County in July 1, 2006 pays a gross wage of $20,000 for the 6
month period July 1, 2006 through December 31, 2006. The annualized salary is $40,000
(i.e., $20,000 ÷ 6 x 12).
The threshold for each full time job is computed using the following formula:
Gross wages
Months worked in tax year

x 12 months

For illustrative purposes, assume that the State average per capita income is $28,212, and is
below the average per capita income in X county based on the data available as of the end of
2006. Since the annualized salary of $40,000 is > 120% of the State average per capita
income of $33,854 (120% x $28,212), it meets the 120% wage threshold for the year. If
eligible, it would qualify for the 100% credit amount.
Monthly Small Business Job Tax Credit. To determine if the 120% wage threshold is met,
gross wages paid for the full month, when annualized, must meet the minimum requirement.
The threshold for each full time job paid for a full month is computed in one of the following
manners:
Option 1: Convert the monthly gross wage amount to an annual amount and compare it to the
appropriate 120% annual per capita income amount or
Option 2: Convert the appropriate 120% annual per capita income amount into a monthly per
capita amount (per capita amount x 120% ÷ 12 months) and compare it to the gross wage
amount paid for the full month. This option is illustrated below.
For example, assume a new job in X County pays a gross wage of $2,800 for a full month in
November 2006, and $3,000 for the full month of December 2006. For illustrative purposes
assume that the State average per capita income is $28,212, and it is below the average per
capita income in X county based on the data available as of the end of 2006 – the per capita
income amount for the month is $2,821 ($28,212 x 120% ÷ 12). Since the $2,800 gross wage
paid for the full month of November is less than $2,821 (i.e., the 120% wage threshold for
the month), the new job does not meet the 120% wage threshold and if eligible, would
qualify for the 50% credit amount (pro-rated) for November. However, since the $3,000
gross wage paid for the full month of December is greater than $2,821 (i.e., the 120%
threshold for the month), the new job meets the 120% wage threshold and if eligible, would
qualify for the 100% credit amount (pro-rated) for December.

Question 22 – Calculation of Gross Wages of 120% County or State Average Per Capita
Income for Half Time Jobs
Q. How is the 120% wage threshold for 2 half time jobs calculated?
A. Annual Small Business Job Tax Credit. To determine if the 120% wage threshold is met,
the gross wages of each half time job is converted into a full time basis amount. (See
Question 5 for qualifying half time jobs.) For example, one full time and two half time jobs
are created by a calendar year taxpayer and maintained the following year. The threshold for
each half time job is computed using the following formula:
Gross wages
Months worked in tax year

x 12 months

x 40 hours per ÷ half time hours worked
full time work
per week
week

In this example, the wage computations for each half time job are:
Half time Job 1. This job is created on March 1, 2006 to work 20 hours per week at gross
wages of $25,000 for the 10 month period March 1, 2006 through December 31, 2006. The
gross wages of this half time job is $60,000 annualized on a full time basis (i.e., $25,000 ÷ 10
x 12 x 40 ÷ 20.) For illustrative purposes, assume that the State average per capita income is
$28,212, and is below the average per capita income in X county based on the data available
as of the end of 2006. Since the annualized salary of $60,000 is > 120% of the State average
per capita income of $33,854 (120% x $28,212), half time job 1 meets the 120% threshold. If
eligible, it would qualify for the 100% credit amount.
Half time Job 2. This job is created on June 1, 2006 to work 25 hours per week at gross
wages of $12,000 for the 7 month period June 1, 2006 through December 31, 2006. The
gross wages of this half time job is $32,914 annualized on a full time basis (i.e., $12,000 ÷ 7
x 12 x 40 ÷ 25.) Half time job 2 does not meet the 120% threshold of $33,854 (see per capita
assumption above). If eligible, it would qualify for the 50% credit amount.
Note: Assuming the taxpayer created 1 full time job and 1 half time (0.5 full time
equivalent) in the “at or above” 120% wage category, and 1 half time (0.5 full time
equivalent) in the “below” 120% category, then the taxpayer would qualify for the 50%
credit amount for the 2 new, full time jobs, since the minimum monthly average requirement
of 2 new, full time jobs was not met in the “at or above” wage threshold.

Monthly Small Business Job Tax Credit. Same as above annual calculation, except the
calculation must be made for each month. In this example, half time job 1 was given a raise
in August and half time job 2 began work during the middle of June. The computations for
each job are:
Half time Job 1.

January
February
March

A. Gross Wages
Paid for Full
Month
$0
$0
$2,400

April
May
June
July
August
September
October
November
December
Total

$2,400
$2,400
$2,400
$2,400
$2,600
$2,600
$2,600
$2,600
$2,600
$25,000

B. Convert Gross Wages Paid to
Full Time Basis Amount
$0
$0
$4,800 ($2,400 x 40 ÷ 20)

C. Compare Column B. to 120%
Per Capita Income Figure (see
assumptions above)
$2,821 = $28,212 x 120% ÷ 12
$2,821
$2,821

$4,800
$4,800
$4,800
$4,800
$5,200 ($2,600 x 40 ÷ 20)
$5,200
$5,200
$5,200
$5,200

$2,821
$2,821
$2,821
$2,821
$2,821
$2,821
$2,821
$2,821
$2,821

D. Eligible Credit
Amount*
$0
$0
100% (Column B ≥
Column C)
100% credit
100% credit
100% credit
100% credit
100% credit
100% credit
100% credit
100% credit
100% credit

Half time Job 2.
A. Gross Wages Paid as
Indicated
January
February
March
April
May
June

B. Convert Gross Wages Paid
to Full Time Basis Amount

C. Compare Column B. to 120%
Per Capita Income Figure (see
assumptions above)
$2,821 = $28,212 x 120% ÷ 12
$2,821
$2,821
$2,821
$2,821
$2,821

$2,720 (1,700 x 40 ÷25)

$2,821

July

$0
$0
$0
$0
$0
$1,200 paid partial
month
$1,700 paid full month

August
September
October
November

$1,700 paid full month
$1,700 paid full month
$1,700 paid full month
$2,000 paid full month

$2,720
$2,720
$2,720
$3,200 ($2,000 x 40 ÷25)

$2,821
$2,821
$2,821
$2,821

December
Total

$2,000 paid full month
$12,000

$3,200

$2,821

D. Eligible Credit
Amount*
$0
$0
$0
$0
$0
$0 - Not eligible; not
paid full month
50% (Column B <
Column C)
50%
50%
50%
100% (Column B ≥
Column C)
100%

Note: Assuming the taxpayer created 1 full time job and 1 half time (0.5 full time
equivalent) in the “at or above” 120% wage category, and 1 half time (0.5 full time
equivalent) in the “below” 120% category, then the taxpayer would qualify for the 50%
credit amount for the 2 new, full time jobs, since the minimum requirement of 2 new, full
time jobs for the tax year was not met in the “at or above” wage threshold.
Reminder: For monthly small business job tax credit purposes, the 100% or 50% credit
amount referred to in this example must be pro-rated on a monthly basis. See Question 16.

Question 23 – When to Compute 120% Threshold
Q. When is the Computation Made to Determine Whether Gross Wages Paid Meet the 120%
Wage Threshold?
A. Annual Small Business Job Tax Credit. The computation to determine whether the gross
wages paid for each job meets the 120% threshold is calculated at the end of each year.
Monthly Small Business Job Tax Credit. The computation to determine whether the gross
wages paid for each job for a full month meets the 120% threshold is calculated each month.

H. PER CAPITA INCOME REQUIREMENTS
Question 24 - County Average Per Capita Income
Q. When are the County Average Per Capita Income Amounts Published?
A. The average per capita income for each county is received annually from the South Carolina
Board of Economic Advisors, usually in May or June. Upon receipt, the Department
publishes an Information Letter listing the most recent per capita income data for each
county. This information can be obtained from the Department’s website at www.sctax.org.
Question 25 - State Average Per Capita Income
Q. When are the State Average Per Capita Income Amounts Published?
A. The average per capita income for the State is received twice each year from the South
Carolina Board of Economic Advisors, usually in May and October. Upon receipt, the
Department publishes an Information Letter listing the most recent State per capita income
data. This information can be obtained from the Department’s website at www.sctax.org.
Question 26 – Per Capita Figures to Use in Computing 120% Threshold
Q. What annual figures should be used to determine the 120% threshold?
A. The most recent figures published by the Department as of the end of the taxpayer’s tax year
must be used. For example, a calendar year taxpayer eligible for the annual small business
job tax credit in 2006 will use the county average per capita income published in the summer
of 2006 and the State average per capita income published in the fall of 2006 to determine if
the 120% threshold is met for each job created in its 2006 tax year. The appropriate figures
published as of the summer and fall of the taxpayer’s base year are used to determine if the
120% threshold is met for each job in its base year. For example, a taxpayer would use
county average per capita income published in the summer of 2005 and State average per
capita income published in the fall of 2005 to determine if the 120% threshold is met for each
job, if its base year is 2005.

I. DETERMINING AND CLAIMING THE CREDIT
Question 27 – Years (Months) Credit is Claimed
Q. When is the job tax credit in Code Sections 12-6-3360(C)(2) and 12-6-3362 available to a
small business?
A. The credit is available to qualifying small businesses in tax years which begin on or after
January 1, 2006.
Annual Small Business Job Tax Credit. The credit is taken each year for 5 years, if the
jobs are maintained each year. Year 1 is the year the jobs are created; the credit is not
claimed in Year 1. The credit is claimed in Years 2 through 6 on the taxpayer’s income tax
return.
For example, a calendar year sole proprietor creating qualifying new jobs in 2006 (Year 1)
generates a credit available for first use on the 2007 tax return (Year 2), and thereafter on the
2008 tax return (Year 3), the 2009 tax return (Year 4), the 2010 tax return (Year 5), and the
2011 tax return (Year 6). If the jobs are maintained, the credit is claimed on the qualifying
taxpayer’s tax return filed on or before April 15, 2008, 2009, 2010, 2011, and 2012.
Monthly Small Business Job Tax Credit. The credit is taken for not more than 60
consecutive months, beginning with the first full month wages are paid for the new full time
jobs created.
For example, a calendar year sole proprietor creating qualifying new jobs in one or more
months of 2006 (Year 1) generates a credit available for first use on the 2006 tax return (Year
1), and thereafter, if the taxpayer continues to meet the credit qualifications on a monthly
basis during the 60 consecutive month period.

The following example illustrates the 60 consecutive month period for the jobs created in tax
year 1 (e.g., 2006). It illustrates that 5 jobs are eligible for the monthly credit during certain
months.
Months in
Tax Year
(e.g., 2006)

Adjusted
Total
Increase
in Jobs

Number of
60 Consecutive Month Periods for Jobs Indicated
Qualifying
Jobs Eligible
Job
Start Time of Credit
End Time of Credit
for Monthly
Period First Earned in Period
Credit
Month Indicated
January
3
3
Jobs 1, 2, and 3
January 2006 *
December 2011
February
3
3
March
3
3
April
4
4
Job 4
April 2006
March 2012
May
1
0
June
1
0
July
1
0
August
1
0
September
1
0
October
1
0
November
1
0
December
5
5**
Job 5
December 2006
November 2012

The 60 consecutive month period for jobs 1, 2, and 3 continues to run each month even though no jobs are eligible
for the credit in May – November.
**These 5 jobs represent jobs 1 – 4 and 1 new job. The 60 consecutive month period continues to run for jobs 1 – 4
from their respective start times.

Question 28 – Credit Form to File
Q. What form is used by a small business to compute and claim the job tax credit?
A. Annual Small Business Job Tax Credit. South Carolina Form TC-4SB is used. This form is
currently being designed and will be available on the Department’s website at
www.sctax.org.
Monthly Small Business Job Tax Credit. South Carolina Form TC-4SM is used. This form
is currently being designed and will be available on the Department’s website at
www.sctax.org.
Traditional Annual Job Tax Credit. The existing Form TC-4 will continue to be used only
by taxpayers creating 10 new jobs under Code Section 12-6-3360(C)(1).
Note: Computer designed forms or spreadsheets are acceptable in lieu of Form TC-4, TC4SB, or TC-4SM, providing all information on the applicable credit form is reflected on the
substitute form. The form is attached to the taxpayer’s tax return. Once a credit period
begins, the annual or monthly method in which the credit is claimed must be used for the
entire credit period.

Question 29 – Claiming Credit When $0 Tax Liability
Q. If a taxpayer has a loss or no South Carolina taxable income for the year, should the credit be
computed and a South Carolina return filed?
A Yes, the taxpayer is required to file an income tax return even if there is no South Carolina
tax liability. Form TC-4SB or Form TC-4SM should be completed and attached to each
year’s tax return, even if there is no South Carolina taxable income. This allows the taxpayer
to claim the credit and establish a credit carryforward.
Question 30 – Income Tax Limitations of Credit
Q. How much of the credit may be claimed per year?
A. The job tax credit taken in one tax year may not exceed 50% of the taxpayer’s income tax,
insurance premium tax, or bank tax liability.
The credit generated by a pass through entity is limited to 50% of the partner’s,
shareholder’s, or member’s income tax liability or married couple’s income tax liability. An
S corporation must first use the credit against its own income tax liability, if any, before
passing the credit through to its shareholders. The amount of credit allowed a shareholder,
partner, or member of a limited liability company is equal to the shareholder’s percentage of
stock ownership, partner’s interest in the partnership, or member’s interest in the limited
liability company for the taxable year multiplied by the amount of the credit the entity would
have been entitled to if it was taxed as a corporation. Once the credit is passed through by the
entity generating it, the credit may not later be used by the entity.

J. COMPUTING THE CREDIT AND CARRYFORWARDS
Question 31 – Determining the Number of New Jobs
Q. How is the number of new, full time jobs determined?
A. Annual Small Business Job Tax Credit. The number of new and additional new, full time
jobs is determined by comparing the monthly average number of full time employees subject
to South Carolina income tax withholding in the applicable county for the taxable year with
the monthly average for the prior taxable year. The computation must be made for employees
paid gross wages in: (1) the “at or above” 120% threshold and (2) the “below” 120%
threshold, and combined, as applicable.
The months to reflect on Form TC-4SB are the months of the business’ tax year. Further, an
appropriate and justifiable day in the month to determine the monthly number of new, full
time employees, such as the last day of each month, must be used. Once a day of the month is
chosen, it must be used for all future months and years. Once the job tax credit is claimed
using the annual computation method in Code Section 12-6-3360(C)(2), the taxpayer must
continue to use this method for the entire credit period.
Monthly Small Business Job Tax Credit. This method requires a “tax year” computation
to determine if there is a monthly average increase of 2 or more for the tax year. It also
requires a computation “each month” to determine if there is an increase of 2 or more jobs
for each month. Both requirements must be met for the taxpayer to be eligible for the 100%
credit (pro-rated). Each requirement is described below.

Tax Year Computation. This computation calculates the monthly average increase of
new, full time jobs for the tax year paid for a full month by comparing the monthly
average number of full time employees paid for a full month in the applicable county for
the taxable year with the monthly average of full time employees paid for a full month for
the base year. See Question 10. This computation is made separately for employees paid
gross wages in the “at or above” 120% threshold and for employees paid gross wages in
the “below” 120% threshold. If there is not a combined total monthly average increase of
2 or more new, full time jobs for the tax year then the taxpayer does not qualify for the
credit. See Examples F and G, Step 1.
Each Month Computation. This computation calculates if there is an adjusted total
increase of 2 or more jobs for each new, full time job paid for a full month by comparing
the adjusted number of qualifying jobs paid for a full month with the qualifying jobs paid
for a full month in the base year (i.e., January of the qualifying year is compared to
January of the base year, and so on for each calendar month in the tax year). This
computation is made separately for employees paid gross wages in the “at or above”
120% threshold and for employees paid gross wages in the “below” 120% threshold to
determine the number of qualifying jobs eligible for the monthly credit. Then any
applicable job adjustments are made. See Question 11, and Examples F and G, Step 2.
The months to reflect on Form TC-4SM are the months of the business’ tax year. Further,
the days of the calendar month are used to determine the monthly number of new, full
time employees. Once the election to use the monthly computation in Code Section 12-63362 is made, the taxpayer must continue to use this method for the entire credit period.
34

Question 32 – Credit for Additional New Jobs
Q. Are additional jobs created during the 5 year (or 60 consecutive month) credit period also
eligible for the credit?
A. Annual Small Business Job Tax Credit. The credit is adjusted for job increases or job
decreases and is allowed for the job level maintained in the taxable year that the credit is
claimed. A business may take credit for additional new, full time jobs added and maintained
during the 5 year credit period (Years 2 – 6), even if only 1 additional job is added. This
additional credit would be claimed for 5 years beginning in the year following the year in
which the qualifying additional new, full time jobs are created. For example, the credit for a
qualifying job increase in Year 2 is claimed in Years 3 – 7, credit for a qualifying job
increase in Year 3 is claimed in Years 4 – 8, etc, providing the jobs are maintained. The
credit amount for any number of additional new, full time jobs created is generally based on
the county designation for the year the additional new, full time jobs are created. See SC
Revenue Ruling #99-5 - Question 27.
Monthly Small Business Job Tax Credit. The credit is allowed for the number of jobs in
the current year in excess of the base year, with certain adjustments. One complexity of this
method is determining the 60 consecutive month period of the credit. The credit is claimed
for 60 consecutive months beginning in the first full month wages are paid for the qualifying
new, full time job. A 60 consecutive month period begins each month additional qualifying
jobs are created for a full month during the credit period. For example, a 2 job increase in
May 2006 begins the 60 month period for the 2 jobs from May 2006 to April 2011. An
additional 1 job qualifying increase in September 2006 begins the 60 month period for the
additional job from September 2006 to August 2011.
Question 33 – Credit Reduced if Employment Falls
Q. How is the credit adjusted for job decreases?
A. Annual Small Business Job Tax Credit. No credit is allowed for the year or any
subsequent year in which the employment falls below the minimum level. If the job level for
which a credit was claimed decreases, the 5 year period for eligibility for the credit continues
to run. A decrease of jobs that does not fall below the minimum required will result in the
credit being allowed in Years 2 through 6 for those jobs that are maintained.
Monthly Small Business Job Tax Credit. No credit is allowed for any month in which the
new employment increase falls below the minimum level. If the job level falls below the
minimum required, the 60 consecutive month period for eligibility for the credit continues to
run.
Question 34 – Carryforward Period
Q. What is the carryforward period?
A. Any unused credit previously claimed but unused can be carried forward 15 years from the
taxable year in which it is earned.
35

Example D – Credit Calculation for Year 1 and Year 2 - Annual Job Tax
Credit – Code Section 12-6-3360(C)(2)
This example is provided to illustrate the basic concepts of computing the annual job tax credit
for Year 1 and Year 2 for a small business in a developed county that creates full time and half
time jobs in the “at or above” 120% threshold and full time and half time jobs in the “below”
120% threshold. This example assumes that all jobs are maintained. The credit computation is
simplified for illustration purposes and is done in 3 steps. Note: For simplicity, it does not
illustrate concepts such as the “combined” total monthly average increase or decrease in
jobs for both wage categories, the treatment of decreases in jobs in one pay threshold, the
concept of job adjustments discussed in Question 11, etc. Other steps not illustrated may
be required depending on the specific facts of a taxpayer.
Step 1 – Determine the number of full time and full time equivalent of half time employees paid
gross wages in the “at or above” 120% wage threshold for each month during the tax
year.

Compute the monthly average increase for the employees paid gross wages in the “at or
above” 120% threshold, using rounding methods discussed in Question 8 (i.e., fractions
of jobs remaining in the “at or above” 120% wage threshold category due to rounding
down to the nearest whole number are moved down to the monthly average
computation for the “below” 120% threshold.)
Determine the credit amount for employees eligible for the 100% credit amount.
Step 2 – Determine the number of full time and full time equivalent of half time employees paid
gross wages in the “below” 120% threshold for each month during the tax year.
Compute the monthly average increase for the employees paid gross wages in the
“below” 120% threshold, using rounding methods discussed in Question 8.
If applicable, include any fractions of jobs remaining from the “at or above” 120%
threshold amount moved to the monthly average increase of jobs created in the “below”
120% category due to rounding fractions of jobs from Step 1.
Determine the credit amount for employees eligible for the 50% credit amount.
Step 3 – Compute the total eligible amount of the job tax credit for the year.
*Base Year (see following two pages.) In order to properly determine the monthly average
increase in a wage category, a taxpayer who has jobs in the “base year” must categorize each job
in the “at or above” 120% wage threshold or in the “below” 120% wage threshold in Steps 1 and
2 below. This is done using the State and county average per capita income figures published as
of the end of the taxpayer’s “base year” (i.e., 2005 in this example.) For simplicity, this example
does not illustrate this principle.

Example D - Step 1 – Computation of full time and half time jobs paying gross wages “at or
above” the 120% threshold.
Months of Tax
Year (e.g., 2006)
January
February
March
April
May
June
July
August
September
October
November
December
Cumulative Total
of Full Time
Jobs ≥120% for
Each Month
Divided by
Months in
Operation
Monthly
Average of New
Jobs ≥120%
Less: Previous
Year Monthly
Average
Monthly
Average Increase
– Rounded Down
to Whole
Number
(Fraction moves
down to Step 2)
Developed
County Credit
Amount
100% Credit
Amount

Base
Year*
(e.g.,
2005)
0
0
0
0
0
0
0
0
0
0
0
0

Total Full
Time Jobs
in Year 1
0
6
6
6
6
6
6
6
6
6
6
6
66

Total “Full Time
Equivalents” of
Half Time Jobs in
Year 1
1.5
1.5
1.5
2
2
2
2
2
2
2
2
2
22.5

Year 1
Total Jobs

Year 2
Total Jobs

1.5
7.5
7.5
8
8
8
8
8
8
8
8
8
88.5

8
8
8
8
8
8
8
8
8
8
8
8
96

7.375

$1,500

$10,500
(7 x $1,500)

$1,500
(1 x $1,500)

Claimed in
Years 2 – 6 if
jobs are
maintained

Claimed in Years
3 – 7 if job is
maintained

Example D - Step 2 – Computation of full time and half time jobs paying gross wages
“below” the 120% threshold.
Months of Tax Year
(e.g., 2006)

Base Total Full
Year* Time Jobs
(e.g., in Year 1
2005)

January
February
March
April
May
June
July
August
September
October
November
December
Cumulative Total of
Full Time Jobs <
120% for Each Month
Divided by Months in
Operation
Monthly Average of
New Jobs < 120%
Rounded Fraction
from Step 1, if
applicable
Less: Previous Year
Monthly Average
Monthly Average
Increase – Rounded
Down to Whole
Number
Developed County
Credit Amount
50% Credit Amount

0
0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
2
2
3
3
3
3
3
19

Total “Full
Time
Equivalents”
of Half Time
Jobs in Year 1
0
0
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
15

Year 1
Total Jobs

Year 2
Total Jobs

0
0
1.5
1.5
1.5
3.5
3.5
4.5
4.5
4.5
4.5
4.5
34

4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.5
54

2.833

4.5

0.375

N/A

3 (2.833 + .375
= 3.208)

1 (i.e.,1.5
rounded down)

$750

$2,250
(3 x $750)
Claimed in
Years 2 – 6 if
jobs are
maintained

$750
(1 x $750)
Claimed in Year
3 – 7 if job is
maintained

Example D - Step 3 – Computation of Total Credit for All New Jobs Created in Year 1 and 2
Step 1 – 100% Credit
Step 2 – 50% Credit
Total Job Tax Credit

Claimed in Year 2
$10,500
$ 2,250
$12,750

Claimed in Year 3
$12,000 ($10,500 + $1,500)
$ 3,000 ($2,250 + $750)
$15,000

Example E – Calculation of Credit for 5 Year Credit Period For New
Jobs Created in 2006 ALL With Gross Wages > 120% Threshold
Annual Job Tax Credit – Code Section 12-6-3360(C)(2)
This example is provided below to explain the annual job tax credit calculation for the entire 5
year credit period (i.e., Years 2 through 6 – 2007 - 2011.) This is a simple example; it assumes
that the corporate taxpayer is a retail facility with one store in a distressed county, has a calendar
year, initially staffed the new facility May 1, 2006, and hired all full time employees at gross
wages over the 120% threshold.
STEP 1: COMPUTATION OF AVERAGE INCREASE IN FULL TIME EMPLOYEES OF
EMPLOYEES PAID GROSS WAGES ≥ 120% THRESHOLD
Base Year
(2005)

Year 1
(2006)

Year 2
(2007)

Year 3
(2008)

Year 4
(2009)

Year 5
(2010)

Year 6
(2011)

(1)*

Cumulative Total of Full
Time Employees in Each
County for Each Month.
(e.g., See Taxpayer 2 in
Example A1)
Divided by Number of
Months in Operation
Monthly Average of Full
Time Employees (rounded
down to whole number)
Less: Previous Year Monthly
Average
Average Increase in Full
Time Employees (Line 3 minus
Line 4)

STEP 2: COMPUTATION OF EMPLOYEES ELIGIBLE FOR CREDIT WITH GROSS
WAGES > 120% THRESHOLD

Year 1 Increase

Year 2

Year 3

Year 4

Year 5

Year 6

Year 2 Increase
Year 3 Increase
Year 4 Increase
Year 5 Increase
Number of New Jobs

2
3

*Note: The Year 2 increase of 2 jobs (see Step 1) is reduced by the 1 job since the 2 job
increase in Year 2 is not maintained. See Step 2, Year 2 Increase, Year 4.
39

STEP 3: COMPUTATION OF ELIGIBLE CREDIT AMOUNT FOR NEW JOBS CREATED
WITH GROSS WAGES ≥ 120% THRESHOLD
Year 2
(2007)

Year 3
(2008)

Year 4
(2009)

Year 5
(2010)

Year 6
(2011)

Number of New Jobs – at or above 120% threshold

Credit Amount for a Distressed County where the
employer pays all new employees greater than 120%
of the county or State average per capita income for
all years

$8,000

Job Tax Credit (Line 1 x Line 2)
(Limited to 50% of tax liability)

$24,000

$40,000

$32,000

$48,000

NOTE: This example only shows the entire credit period for the initial 3 jobs created in 2006.
The credit is first claimed in the year following the creation of the new jobs; it is not claimed in
the year the new jobs are created. For example, qualifying new jobs created in this example in
the 2006 tax year generate a credit available for first use on the 2007 tax return, filed March 15,
2008, providing the jobs are maintained. An additional credit is created for the job increase in
2007; it is claimed on the 2008 through 2012 tax returns for the jobs maintained.

Example F – Credit Calculation for Qualifying Months in Year 1 Monthly
Job Tax Credit – Code Section 12-6-3362 (Uses Same Number of Jobs as
Shown in Example D for Annual Credit)
This example is provided to illustrate the basic principles used in computing the monthly job tax
credit for Year 1 for a small business in a developed county that creates full time and half time
jobs in the “at or above” 120% threshold and full time and half time jobs in the “below” 120%
threshold. It assumes that all jobs are paid for a full month. To compare the “monthly” and
“annual” small business job tax credit, this example uses the same number of jobs shown in
Example D illustrating the “annual” credit computation. The “monthly” credit computation is
calculated in 4 steps as illustrated below.
General Instructions. These instructions explain the numerical computations illustrated in
Example F on the following pages. They are intended to be read in conjunction with the
example.
■ STEP 1 – For the Tax Year. Calculate the monthly average increase in new, full time jobs
for the tax year. Complete the applicable steps based on the wage thresholds paid.
Step 1A – Applies to Small Businesses with Gross Wages Paid in the “At or Above” 120%
Wage Threshold for the Full Month.
Column A. List the months in the tax year (e.g., January – December for a calendar year
taxpayer.)
Column B. List the cumulative total of full time jobs paid for the full month (i.e., total jobs in
January paid for the full month, total jobs in February paid for the full month, etc.)
Column C. List the cumulative total of full time equivalent of half time jobs paid for the full
month (i.e., total full time equivalent of half time jobs in January paid for the full month, total
full time equivalent of half time jobs in February paid for the full month, etc.) A half time job is
a job requiring at least 20 hours a week for a year. In this example, 3 half time jobs in January
are listed as 1.5 “full time equivalent” jobs, and 4 half time jobs in April are listed as 2 “full time
equivalent” jobs.
Column D. Add Columns B and C to determine the cumulative total of full time jobs in the tax
year paid in the > 120% wage threshold. Divide the cumulative total by the number of months
the taxpayer is in operation for the year (12 months in this example). The result is the monthly
average of jobs in the > 120% wage threshold for the tax year.
Column E. The “base year” is the year preceding the first year a taxpayer creates the number of
jobs necessary to qualify for the job tax credit; the base year may or may not be the first year of
operation of the facility. In this example, the base year is 2005 and is 0 for all months since the
company was not in operation in 2005. Since the base year is 0 in this example, the base year
amounts for the full time and full time equivalent of half time jobs have been combined into one
41

column for simplicity. The “base year” amount does not change for the entire credit period. In this
example, 2005 is the “base year” for all years of the credit period.
Column F. Determine the total increase in jobs in the current tax year (2006 in this example.)
This is determined by subtracting the total base year jobs from the total jobs in the tax year. The
cumulative total is divided by the months in operation and the result is the monthly average
increase for the tax year rounded down to a whole number, if necessary. In this example, the
monthly average of 7.375 is rounded down to 7; the resulting .375 fraction is moved down to the
existing < 120% wage threshold and added to the monthly average in the < 120% wage threshold
before rounding down.
Step 1B - Applies to Small Businesses with Gross Wages Paid in the “Below” 120% Wage
Threshold for the Full Month.
Columns A – E. See explanations in Step 1A above.
Column F. See Column F explanation in Step 1A above. Note, however, that the fraction moved
down from Step 1A, Column F is added to the monthly average increase of new jobs in the <
120% wage threshold. In this example, the .375 fraction from Step 1A, Column F is added to the
2.83 monthly average amount in the < 120% wage threshold; the result is a monthly average
increase for the tax year of 3.208 or 3 (rounded down.) Note: Any fraction remaining in the
“below” threshold cannot be moved up to the “at or above” 120% wage threshold.
Step 1C – Applies to Small Businesses Paying Wages in Either Wage Threshold.
Determine if the required monthly average increase for the tax year is met. In order to qualify for
the small business job tax credit, the taxpayer must have a combined total monthly average
increase for the tax year from Steps 1A and 1B of 2 or more new, full time jobs. In order to
qualify for the 100% credit amount, the taxpayer must have a minimum monthly average of 2 or
more jobs in this wage category for the tax year. If the required monthly average increase for the
tax year is met, then complete Step 2 to determine the number of qualifying jobs for each month.
■ STEP 2 – For Each Month. Calculate the number of qualifying jobs eligible for the credit
for each month in the tax year.
Step 2A – Applies to Small Businesses with Gross Wages Paid in the “At or Above” 120%
Wage Threshold for the Full Month.
Column A. This is the amount from Step 1A, Column F.
Column B. See Question 11 for a discussion of job adjustments required to determine the
number of qualifying jobs eligible for the monthly small business job tax credit. Enter all
required adjustments. In this example, since the January increase in the ≥ 120% wage category is
not 2 or more, the entire amount [1.5] is moved down to the < 120% wage category and added to
its January job amount, if any, for possible eligibility for the 50% credit amount. However, since
the February increase in the ≥ 120% wage category is 2 or more, only the fractional job [0.5] is
moved down to the < 120% wage category and added to its February job amount for possible
42

eligibility for the 50% credit amount. As a result, 7 jobs are eligible for the 100% credit amount
in February (pro-rated).
Column C. Subtract Columns A and B to get the adjusted total increase in jobs (rounded)
qualifying for the credit each month.
Columns D and E. These columns illustrate that the adjusted total increase in jobs for the month
in the ≥ 120% wage category must be 2 or more to qualify for the 100% credit amount. See
January where the total is not 2. The amount in Column E is the number of jobs qualifying for
the 100% credit amount (pro-rated) each month.
Step 2B - Applies to Small Businesses with Gross Wages Paid in the “Below” 120% Wage
Threshold for the Full Month.
Column A. This is the amount from Step 1B, Column F.
Column B. See Question 11 for a discussion of job adjustments required to determine the
number of qualifying jobs eligible for the monthly small business job tax credit. Enter all
required adjustments. In this example, since the January increase in the ≥ 120% wage category is
not 2 or more, the entire amount [1.5] is moved down to the < 120% wage category and added to
its January job amount, if any, for possible eligibility for the 50% credit amount. In this example,
since the adjusted total increase of jobs is not 2 or more, the 1.5 jobs moved down do not qualify
for the 50% credit for January. Likewise, the fractional job [0.5] moved down and added to the
February job increase in the < 120% wage category amount does not qualify for the 50% credit
amount. However, the fractional job [0.5] moved down in March does qualify for the 50% credit
amount in March since the increase for March in the < 120% wage category is 2 or more.
Column C. Add Columns A and B. This column results in the adjusted total increase of jobs.
This result in this column must then be rounded down to the nearest whole number.
Columns D and E. For each month, look at the adjusted total increase in jobs, after rounding, in
Column C to determine if there is an increase of 2 or more for each month in the < 120% wage
category. If “yes,” then enter the rounded number from Column C in Column E.
Caution: Once a taxpayer meets the job tax credit requirements for the tax year and if the
taxpayer has an adjusted total increase of 2 or more jobs in the ≥ 120% wage category for the
month, then an additional job of 1 created in the < 120% wage category for the month is looked
at separately and is eligible for the 50% credit amount. See April and May in this example where
the 1 job increase qualifies for the 50% credit.
Column E. This is the number of jobs qualifying for the 50% credit amount (pro-rated) each
month.

■ STEP 3 – For Each Month. Calculate the “tentative” monthly job tax credit for the tax
year.
Step 3A – Applies to Small Businesses with Gross Wages Paid in the “At or Above” 120%
Wage Threshold for the Full Month.
Column A. Amount from Step 2A, Column E.
Column B. Enter appropriate 100% credit amount based on county ranking. See Question 16.
Add the full amount of any “additional” credit, if applicable. See Question 17.
Column C. The credit amount in Column B is pro-rated on a monthly basis at 8.33%.
Column D. Multiply Columns A, B, and C for each month. The sum of all months is the total
“tentative” monthly credit amount in the ≥ 120% wage threshold.
Step 3B – Applies to Small Businesses with Gross Wages Paid in the “Below” 120% Wage
Threshold for the Full Month.
Column A. Amount from Step 2B, Column E.
Column B. Enter appropriate 50% credit amount based on county ranking. See Question 16.
Add the full amount (not 50%) of any “additional” credit, if applicable. See Question 17.
Column C. The credit amount in Column B is pro-rated on a monthly basis at 8.33%.
Column D. Multiply Columns A, B, and C for each month. The sum of all months is the total
“tentative” monthly credit amount in the < 120% wage threshold.
■ STEP 4 – For the Tax Year. Applies to Small Businesses Paying Wages in Either Wage
Threshold.
Step 4A – Compute the “maximum applicable annual credit.” This is the maximum
applicable credit amount determined on an “annual” basis under Code Section 12-6-3360(C)(2).
The amount of the credit claimed under the alternative monthly method in Code Section 12-63362 cannot exceed the “maximum applicable annual credit” determined in this Step 4A. This is
determined from Step 1C and multiplying the combined total monthly average increase
(decrease) in the appropriate wage threshold by the applicable credit amount.
Step 4B – Compute the total “tentative” monthly credit amount determined under Code
Section 12-6-3362. Total of amounts from Steps 3A and 3B.
Step 4C – Determine the ‘actual” job tax credit amount to claim on Form SC TC-4SM.
This amount is the lesser of Step 4A or Step 4B. Note: The job tax credit taken in one tax year
may not exceed 50% of the taxpayer’s tax liability. (See Questions 18 and 30 for more
information on how much of the credit may be claimed each tax year.)

Example F - Step 1 – Calculate the monthly average increase in new, full time jobs for the
tax year.
Step 1A – Monthly Average Calculation for Employees Paid Gross Wages ≥ 120% Threshold for the Full Month, if applicable
A. Months of Tax Year (e.g., 2006)
D. Total Jobs
E. Base Year
F. Total Increase
C. Total “Full Time
B. Total Full
(i.e., 2005)*
in Tax Year
in Jobs in Tax
Equivalent” of Half
Time Jobs in
(Column B+C)
Year > 120%
Time Jobs in Tax
Tax Year Paid
(Column D-E)
Year Paid for the
for the Full
Full Month
Month
January
February
March
April
May
June
July
August
September
October
November
December
Cumulative Total of Full Time Jobs > 120%
Paid for Each Full Month
Divided by Months in Operation
Monthly Average of New Jobs > 120%
(Column F)

0
6
6
6
6
6
6
6
6
6
6
6
66

1.5
1.5
1.5
2
2
2
2
2
2
2
2
2
22.5

1.5
7.5
7.5
8
8
8
8
8
8
8
8
8
88.5

0
0
0
0
0
0
0
0
0
0
0
0
0

1.5
7.5
7.5
8
8
8
8
8
8
8
8
8
88.5

12
7.375

0
0

12
7.375
(.375 fraction
moves to Step 1B)
7

Monthly Average Increase for the Tax
Year (Rounded Down to Whole Number) –
Enter result in Step 1C

Step 1B – Monthly Average Calculation for Employees Paid Gross Wages < 120% Threshold for the Full Month, if applicable
A. Months of Tax Year (e.g., 2006)
B. Total Full
C. Total “Full Time
D. Total Jobs
E. Base Year
F. Total Increase
(i.e., 2005)*
Time Jobs in
Equivalent” of Half
in Tax Year
in Jobs in Tax
(Column B+C)
Tax Year Paid
Time Jobs in Tax
Year < 120%
(Column D-E)
for the Full
Year Paid for the
Month
Full Month
January
February
March
April
May
June
July
August
September
October
November
December
Cumulative Total of Full Time Jobs <120%
Paid for Each Full Month
Divided by Months in Operation
Monthly Average of New Jobs <120% +
Rounded Fraction from Step 1A, if
applicable (Column F)
Monthly Average Increase for the Tax
Year (Rounded Down to Whole Number)
Enter result in Step 1C

0
0
0
0
0
2
2
3
3
3
3
3
19

0
0
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
15

0
0
1.5
1.5
1.5
3.5
3.5
4.5
4.5
4.5
4.5
4.5
34

0
0
0
0
0
0
0
0
0
0
0
0
0

0
0
1.5
1.5
1.5
3.5
3.5
4.5
4.5
4.5
4.5
4.5
34

12
2.83

0
0

12
2.83 + .375
(fraction from
Step 1A) = 3.208
3

Step 1C – Combined Total Monthly Average Increase (or Decrease) in New Jobs for the Tax Year
Step 1A ≥ 120% monthly average increase (or decrease)
7 (Must have 2 or more in this wage category to qualify for the 100%
credit.)
Step 1B <120% monthly average increase (add increases; subtract decreases)
3
10 (Must be 2 or more to qualify for the job tax credit. If 2 or more
COMBINED TOTAL Monthly Average Increase
then complete Step 2.)
*“Base Year” amounts will not change for the entire credit period.

Example F - Step 2 – Calculate the number of qualifying jobs eligible for the credit for each
month in the tax year.
Step 2A – Calculation of Eligible Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)

January

A. Total Increase
(Decrease) in Jobs
in Tax Year Paid
for Full Month
(>120% Wage
Category)
From Step 1A,
Column F
1.5

February

7.5

March
April
May
June
July
August
September
October
November
December

7.5
8
8
8
8
8
8
8
8
8

B. Job Adjustment,
if applicable.

D. Is Column C
monthly increase ≥
2 for the month?

E. Number of
Qualifying Jobs
Eligible for
Monthly Credit
(If the month in
Column D is No,
enter 0)

0 (i.e., 1.5 - 1.5)

7 (i.e., 7.5 - 0.5)

Yes

7 see Feb. above
8
8
8
8
8
8
8
8
8

Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes

7
8
8
8
8
8
8
8
8
8

C. Adjusted
Total Increase
in Jobs

(See Column A)
Column A – B
(The result is a
whole number)
1.5 - amount < 2 so
1.5 moved down to <
120%
0.5 fraction moved
down to <120%
0.5 see Feb. above
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a

Step 2B – Calculation of Eligible Jobs Paid Gross Wages < 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)

A. Total Increase
(Decrease) in Jobs
in Tax Year Paid
for Full Month
(<120% Wage
Category)
From Step 1B,
Column F

B. Fractional Jobs,
if applicable

January

1.5

February
March
April
May
June
July
August
September
October
November
December

0
1.5
1.5
1.5
3.5
3.5
4.5
4.5
4.5
4.5
4.5

0.5
0.5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a

Enter all adjustments
moved from other
wage category

D. Is Column C
monthly increase ≥ 2
for the month?
(See Note 1 for an
exception if taxpayer
qualifies for credit in
≥ 120% wage
category)

E. Number of
Qualifying Jobs
Eligible for
Monthly Credit
(If the month in
Column D is No,
enter 0)

1.5= 1 (rounded)

0.5=0 (rounded)
2
1.5=1 (rounded)
1.5=1 (rounded)
3
3
4
4
4
4
4

No
Yes
Yes Exception
Yes Exception
Yes
Yes
Yes
Yes
Yes
Yes
Yes

0 Do not qualify
for credit; increase
in both wage
thresholds < 2
0
2
1 Exception
1 Exception
3
3
4
4
4
4
4

C. Adjusted
Total Increase
in Jobs
Column A+B,
then round down
to whole number

*Note 1: Step 2B, Column D Exception. Since the taxpayer meets the job tax credit requirements in Step 1C (i.e., combined
monthly average increase for the tax year ≥ 2) and has an increase of 2 or more jobs in the ≥ 120% wage category for the month
(see April and May), then the 1 additional job created in the < 120% wage category for the month is looked at separately, and is
eligible for the 50% credit amount. As a result, in this example, the 1 job increase in April and May in the < 120% wage category
qualifies for the credit.

Example F - Step 3 – Calculate the “tentative” monthly job tax credit for the tax year.
Step 3A – Calculation of Tentative Credit for Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)
January
February
March
April
May
June
July
August
September
October
November
December
TOTAL

A. Number of Qualifying
Jobs Eligible for
Monthly Credit
From Step 2A, Column E
0
7
7
8
8
8
8
8
8
8
8
8

B. 100% Credit Amount Per
County Ranking (Including any
applicable additional credit
amounts)
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500

C. Monthly %

8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%

D. “Tentative”
Monthly Credit
Amount ≥ 120%
Wage Threshold
$0
$875
$875
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$10,750

Step 3B – Calculation of Tentative Credit for Jobs Paid Gross Wages < 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)

A. Number of Qualifying
Jobs Eligible for
Monthly Credit
From Step 2B, Column E

B. 50% Credit Amount Per
County Ranking (Including any
applicable additional credit
amounts)

C. Monthly %

January
February
March
April
May
June
July
August
September
October
November
December
TOTAL

0 average < 2
0 average < 2
2
1
1
3
3
4
4
4
4
4

$750
$750
$750
$750
$750
$750
$750
$750
$750
$750
$750
$750

8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%

D. “Tentative”
Monthly Credit
Amount
< 120% Wage
Threshold
$0
$0
$125
$62
$62
$187
$187
$250
$250
$250
$250
$250
$1,873

Example F - Step 4 - Calculate the “maximum applicable annual credit” to determine the
“actual” job tax credit amount.
Step 4A. Maximum Applicable Annual Credit – From Step 1C
Total Monthly Average
Increase for Tax Year
7
$1,500
$10,500
3
$750
$ 2,250
Maximum Applicable Credit
$12,750
Step 4B. Tentative Monthly Credit – From Step 3 (limited to maximum applicable credit)
≥ 120% wage threshold
$10,750
< 120% wage threshold
$ 1,873
Total Tentative Monthly Credit
$12,623
Step 4C. Actual Job Tax Credit Amount Claimed on Form SC TC-4SM
Lesser of Step 4A or 4B
$12,623
The maximum applicable annual credit is the credit amount determined on an “annual” basis under Code Section 12-63360(C)(2); the amount of credit claimed under the alternative monthly method in Code Section 12-6-3362 cannot exceed the
“maximum applicable annual credit.”

Example G – Credit Calculation for Qualifying Months in Year 1 Monthly
Job Tax Credit – Illustrates Base Year > 0 and Job Decrease in a Wage
Category for the Year - Code Section 12-6-3362
This example is provided below to explain the monthly job tax credit calculation for Year 1 of
the credit period when there is a monthly average decrease in jobs for the tax year in one wage
threshold and a monthly average increase in jobs for the tax year in the other wage threshold.
This is a simple example; it assumes that the corporate taxpayer is a retail facility with one store
in a distressed county, has a calendar year, initially staffed the new facility in January 1, 2005,
and paid all full time employees at gross wages over the 120% threshold each month for the full
month.
General Instructions. These instructions explain the numerical computations illustrated in
Example G on the following pages. They are intended to be read in conjunction with the
example.
■ STEP 1 – For the Tax Year. Calculate the monthly average increase in new, full time jobs
for the tax year. Complete the applicable steps based on the wage thresholds paid. See
explanation in Example F for Steps 1A, 1B, and 1C, except as otherwise noted below.
Column F. A taxpayer who has a base year other than 0 may need to determine the base year
amount for the full time jobs and the base year amount for the “full time equivalent” of half time
jobs separately. In this example, for simplicity, the base year is assumed to be 8 for all months in
both wage categories. Reminder: Only include those jobs paid for a full month in the base year
monthly amounts.
Step 1C. Since the monthly average decrease of 3 jobs in the “at or above” 120% wage threshold
is netted against the 6 job increase in the “below” 120% wage threshold, the credit, including the
maximum applicable credit is based upon a monthly average increase of 3 jobs for the tax year.
The number of jobs qualifying for the credit is adjusted accordingly.
■ STEP 2 – For Each Month. Calculate the number of qualifying jobs eligible for the credit
for each month in the tax year.
Steps 2A and 2B, Column B. The job decrease for any month is entered as an adjustment in
Column B. In this example, no jobs are eligible for the 100% credit amount after adjustment. The
job adjustment for the decrease reduces the number of jobs eligible for the 50% credit amount.
See Column E, Step 2B for the number of jobs qualifying for the credit after all adjustments.

■ STEP 3 – For Each Month. Calculate the “tentative” monthly job tax credit for the tax
year.
Step 3A is not applicable in this example and does not need to be completed since the increase
for the tax year in this wage category is < 2. The taxpayer is not eligible for the 100% credit
amount.
■ STEP 4 – For the Tax Year. Applies to Small Businesses Paying Wages in Either Wage
Threshold.
Step 4A – Compute the “maximum applicable annual credit.” This is the maximum
applicable credit amount determined on an “annual” basis under Code Section 12-6-3360(C)(2).
The amount used to compute the maximum applicable credit must be “adjusted” when there is a
total job decrease for the tax year in one wage category. The maximum applicable annual credit
is determined from Step 1C, after adjustment. In this example, the Step 1A job decrease of 3 for
the tax year must reduce the 6 job increase for the tax year in Step 1B, and the combined total
increase of 3 jobs is used to compute the maximum applicable credit.

Example G - Step 1 – Calculate the monthly average increase in new, full time jobs for the
tax year.
Step 1A – Monthly Average Calculation for Employees Paid Gross Wages ≥ 120% Threshold for the Full Month, if applicable
A. Months of Tax Year (e.g., 2006)
D. Total Jobs
E. Base Year
F. Total Increase
C. Total “Full Time
B. Total Full
(i.e., 2005)
in Tax Year
in Jobs in Tax
Equivalent” of Half
Time Jobs in
(Column B+C)
Year ≥ 120%
Time Jobs in Tax
Tax Year Paid
(Column D-E)
Year Paid for the
for the Full
Full Month
Month
January
5
0
5
8
(3)
February
5
0
5
8
(3)
March
5
0
5
8
(3)
April
5
0
5
8
(3)
May
5
0
5
8
(3)
June
5
0
5
8
(3)
July
5
0
5
8
(3)
August
5
0
5
8
(3)
September
5
0
5
8
(3)
October
5
0
5
8
(3)
November
5
0
5
8
(3)
December
5
0
5
8
(3)
Cumulative Total of Full Time Jobs ≥ 120% 60
0
60
96
(36)
Paid for Each Full Month
Divided by Months in Operation
12
12
12
Monthly Average of New Jobs ≥ 120%
5
8
(3)
(Column F)
(3)
Monthly Average Increase(Decrease) for
the Tax Year (Rounded Down to Whole
Number) – Enter result in Step 1C
Step 1B – Monthly Average Calculation for Employees Paid Gross Wages < 120% Threshold for the Full Month, if applicable
E. Base Year
A. Months of Tax Year (e.g., 2006)
F. Total Increase
D. Total Jobs
C. Total “Full Time
B. Total Full
(i.e., 2005)
in Jobs in Tax
in Tax Year
Equivalent” of Half
Time Jobs in
(Column B+C)
Year < 120%
Time Jobs in Tax
Tax Year Paid
(Column D-E)
Year Paid for the
for the Full
Full Month
Month
January
0
12
12
8
4
February
0
12
12
8
4
March
0
12
12
8
4
April
0
12
12
8
4
May
0
12
12
8
4
June
0
13
13
8
5
July
0
16
16
8
8
August
0
18
18
8
10
September
0
19
19
8
11
October
0
15
15
8
7
November
0
15
15
8
7
December
0
12
12
8
4
Cumulative Total of Full Time Jobs <120%
0
168
168
96
72
Paid for Each Full Month
Divided by Months in Operation
12
12
12
Monthly Average of New Jobs <120% +
14
8
6
Rounded Fraction from Step 1A, if
applicable (Column F)
6
Monthly Average Increase for the Tax
Year (Rounded Down to Whole Number)
Enter result in Step 1C
Step 1C – Combined Monthly Average Increase (or Decrease) in New Jobs for the Tax Year
Step 1A ≥ 120% monthly average increase (or decrease)
(3) (Must have 2 or more in this wage category to qualify for the 100% credit)
Step 1B < 120% monthly average increase (add increases; subtract decreases)
6
3 (Must be 2 or more to qualify for the job tax credit) – Amount to use to
COMBINED TOTAL Net Monthly Average Increase
compute maximum applicable annual credit amount.
*“Base Year” will not change during the entire credit period.
Since the “combined” monthly average increase for the tax year in Step 1C is 2 or more, the taxpayer meets the qualifying requirements and
should complete Step 2. Note: the taxpayer qualifies only for the 50% credit amount for only 3 jobs.

Example G - Step 2 – Calculate the number of qualifying jobs eligible for the credit for
each month in the tax year.
Step 2A – Calculation of Eligible Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)

A. Total Increase
(Decrease) in Jobs
in Tax Year Paid
for Full Month
(≥120% Wage
Category)
From Step 1A,
Column F

B. Job Adjustment,
if applicable

January

(3)

February
March
April
May
June
July
August
September
October
November
December

(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)
(3)

C. Adjusted
Total Increase
in Jobs

D. Is Column C
monthly increase ≥ 2
for the month?

E. Number of
Qualifying Jobs
Eligible for
Monthly Credit
(If the month in
Column D is No,
enter 0)

No
No
No
No
No
No
No
No
No
No
No

0
0
0
0
0
0
0
0
0
0
0

(See Column A)
Column A - B
(The result is a
whole number)
0 = [(3) – (3) or
(3) + 3] See Note
0
0
0
0
0
0
0
0
0
0
0

Step 2B – Calculation of Eligible Jobs Paid Gross Wages < 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)

A. Total Increase
(Decrease) in
Jobs in Tax Year
Paid for Full
Month (<120%
Wage Category)
From Step 1B,
Column F

B. Job Adjustment,
if applicable

January

(3)

1 = [4 + (3)]

D. Is Column C
monthly
increase ≥ 2 for
the month?
(Exception if
taxpayer
qualifies for
credit in ≥ 120%
wage category)
No

February

(3)

March

(3)

April

(3)

May

(3)

June
July
August
September
October
November
December

5
8
10
11
7
7
4

(3)
(3)
(3)
(3)
(3)
(3)
(3)

2
5
7
8
4
4
1

Yes
Yes
Yes
Yes
Yes
Yes
No

Enter all adjustments
moved from other
wage category

C. Adjusted
Total Increase
in Jobs
Column A+B,
then round down
to whole number

E. Number of
Qualifying Jobs
Eligible for Monthly
Credit*
(If the month in Column
D is No, enter 0)

0 (do not qualify for
credit; increase < 2)
0 (do not qualify for
credit; increase < 2)
0 (do not qualify for
credit; increase < 2)
0 (do not qualify for
credit; increase < 2)
0 (do not qualify for
credit; increase < 2)
2
5
7
8
4
4
0 (do not qualify for

credit; increase < 2)
Note: The monthly average decrease of 3 jobs in each month in the “at or above” 120% wage threshold is netted against the job
increase in the “below” 120% wage threshold in each month. See Step 2B, Column C.

Example G - Step 3 – Calculate the “tentative” monthly job tax credit for the tax year.
Step 3A – Calculation of Tentative Credit for Jobs Paid Gross Wages ≥ 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)
January
February
March
April
May
June
July
August
September
October
November
December
TOTAL

A. Number of Qualifying
Jobs Eligible for
Monthly Credit
From Step 2A, Column E
0
0
0
0
0
0
0
0
0
0
0
0

B. 100% Credit Amount Per
County Ranking (Including any
applicable additional credit
amounts)
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000
$8,000

C. Monthly %

8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%

D. “Tentative”
Monthly Credit
Amount ≥ 120%
Wage Threshold
0
0
0
0
0
0
0
0
0
0
0
0
0

Step 3B – Calculation of Tentative Credit for Jobs Paid Gross Wages < 120% Threshold for the Full Month, if applicable

Months of Tax
Year (e.g., 2006)

A. Number of Qualifying
Jobs Eligible for
Monthly Credit
From Step 2B, Column E

January
February
March
April
May
June
July
August
September
October
November
December
TOTAL

0
0
0
0
0
2
5
7
8
4
4

0 (increase < 2)

B. 50% Credit Amount Per
County Ranking (Including any
applicable additional credit
amounts)
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000
$4,000

C. Monthly %

8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%

D. “Tentative”
Monthly Credit
Amount < 120%
Wage Threshold
$0
$0
$0
$0
$0
$666
$1,666
$2,332
$2,666
$1,332
$1,332
$0
$9,994

Example G - Step 4 - Calculate the “maximum applicable annual credit” to determine the
“actual” job tax credit amount.
Step 4A. Maximum Applicable Annual Credit* – From Step 1C
Total Monthly Average Increase for Tax Year
(3)
$8,000
6 – 3 decrease from above = 3 net (Adjustment
$4,000
due to total job decrease in one wage category)
Maximum Applicable Credit

$0
$12,000
$12,000

Step 4B. Tentative Monthly Credit – From Step 3 (limited to maximum applicable credit)
≥ 120% wage threshold
$0
< 120% wage threshold
$9,994
Total Tentative Monthly Credit
$9,994
Step 4C. Actual Job Tax Credit Amount Claimed on Form SC TC-4SM
Lesser of Step 4A or 4B
$9,994
*The maximum applicable annual credit is the credit amount determined on an “annual” basis under Code Section 12-63360(C)(2); the amount of credit claimed under the alternative monthly method in Code Section 12-6-3362 cannot exceed the
“maximum applicable annual credit.”

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Ray N. Stevens
Ray N. Stevens, Director
May 1
, 2007
Columbia, South Carolina

COMPARISON OF JOB TAX CREDIT OPTIONS – Appendix
CAVEAT: This comparison is written in general terms. It may not be relied on as a substitute for researching
original sources of authority.
“Traditional” Annual Job Tax Credit
Code Section
Form
Qualifying Type Business

Size Requirement
Taxes Credit Used Against
Entities Qualifying
Credit Amount – Basic

Credit Amount – Additional
Monthly Average Increase for
Tax Year Requirement

12-6-3360(C)(1)
TC-4
Manufacturing, processing, warehousing,
distribution, research & development,
corporate office, technology intensive,
banking, tourism, qualifying service
related facility, qualifying health care
related facility, retail facility in distressed
and least developed county, and service
related industry in distressed or least
developed county
None
Corporate, individual, bank, insurance
C corporation, S corporation, LLC,
Partnership, or Sole Proprietorship
$1,500 - $8,000 per year for each new,
full time job created, depending on
county designation

$1,000 multicounty park
$1,000 Brownsfield Voluntary Cleanup
Program
10 ( Exceptions: 20 for new hotels, and
30 -250 for qualifying service related
facilities in underdeveloped, moderately
developed and developed counties)
A cumulative total of qualifying
employees in each county for each month
divided by 12 months or actual number of
months in operation during current tax
year

Compensation/Gross Wage
Requirement

Only for qualifying service related
facilities in underdeveloped, moderately
developed, and developed counties

“Annual” Small
Business Job Tax
Credit
12-6-3360(C)(2)
TC-4SB
same

“Monthly” Small Business Job
Tax Credit
12-6-3362
TC-4SM
same

99 or fewer employees
worldwide
same
same

99 or fewer employees worldwide

$1,500 - $8,000 (100%
credit amount) or $750 $4,000 (50% credit
amount) depending on
county designation and
compensation amount
same

Basic amount same as annual
small business, but limited to
8.33% per month and to
“maximum applicable annual
credit” for the year

same
same

same, but pro-rated 8.33%
monthly

2 *See exceptions

2 *See Exceptions

A cumulative total of
qualifying employees in
each county for each
month divided by 12
months or actual number
of months in operation
during current tax year
for each wage threshold,
then combined.
Yes (affects whether
jobs qualify for 100% or
50% credit amount)

A cumulative total of qualifying
employees paid for a full month
in each county for each month
divided by 12 months or actual
number of months in operation
during current tax year for each
wage threshold, then combined.
(Job requirement for each full
month also.)
Yes (affects whether jobs qualify
for a pro-rated 100% or 50%
credit amount)

Based on ≥ 120% or <
120% per capita income
for State or county, the
lesser of

Based on ≥ 120% or <120% per
capita income for State or county,
the lesser of
Annualize pay each month

Tax Limitation
Carry Forward
Period Credit Duration
Period to Claim

50% of tax liability
15 years
5 years
Years 2 – 6 after job creation in Year 1, if
jobs are maintained

Effective Date

Period open under statute

Base Year

Year preceding first year a taxpayer
creates the number of new jobs to qualify,
regardless of whether it is the first year of
operation

Annualize pay for year
same
same
5 years
Years 2 – 6 after job
creation in Year 1, if
jobs are maintained
Tax years beginning on
or after 2006
Same (jobs classified by
wage category)

same
same
60 consecutive months
60 consecutive months beginning
first full month wages are paid for
each job increase
Tax years beginning on or after
2006
Same (jobs classified by wage
category and include only jobs for
which wage are paid for the full
month)

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