What is South Carolina's tax credit for hiring veterans, who qualifies, and how much is it?

Plain-English summary

South Carolina Revenue Ruling #23-1 explains a state tax credit — created by Act No. 237 of 2022 and codified at S.C. Code Ann. § 12-6-3720 — for employers who hire veterans into a registered apprenticeship program.

Who the employer must hire. The new hire must be a veteran of the U.S. Armed Forces (Army, Navy, Marine Corps, Air Force, Space Force, or Coast Guard, including their reserve components and the Army/Air National Guard when called to active duty) who served on active duty and was either honorably discharged or released because of a service-connected disability. A "general discharge under honorable conditions" is not good enough — the employer should confirm the discharge type on the veteran's DD-214. The veteran must be hired within three years of that discharge, as a new employee (someone who already worked for you before June 22, 2022 doesn't count), into a U.S. Department of Labor-validated registered apprenticeship program.

The hiring window. The veteran must be hired on or after June 22, 2022 and on or before December 31, 2026. (You can still claim the credit after 2026 on the same schedule, as long as the qualifying hire happened inside that window.)

How much, and when it's earned. The credit is first earned in the tax year the veteran completes 12 consecutive months of employment (partial months don't count):

• $3,000 for the year the employee reaches 12 consecutive months,
• $2,500 for the year they reach 24 consecutive months, and
• $1,000 for the year they reach 36 consecutive months.

So an employer can claim it for up to three years, but only if the veteran stays employed that long. Each year's credit is capped at the employer's tax liability for that year.

What taxes it offsets. Individual income tax (§ 12-6-510), corporate income tax (§ 12-6-530), corporate license (franchise) tax (Chapter 20, Title 12), bank franchise tax (Chapter 11, Title 12), the income tax on building and loan associations (Chapter 13, Title 12), and insurance premium taxes (Chapter 7, Title 38 — though SCDOR notes it does not administer insurance premium taxes).

The limits that trip people up.

• Not refundable, and there is no carryforward — any credit above your liability in the earning year is simply forfeited.
• One credit per veteran, ever. If any employer claims the credit for an eligible employee, a later employer can't claim it again — even if the first employer only used one or two of the three years. Employers check a prospective hire's status on MyDORWAY to see whether the credit was already claimed.
• Half-time counts. Using the Job Tax Credit definitions (§ 12-6-3360), two half-time apprentice-employees (each ≥20 hours/week) equal one full-time one — but both must complete 12 consecutive months before the employer can claim.

How to claim. Have the prospective hire complete Part A of Form I-65 (Pre-Screening for Veterans Apprenticeship Credit); the employer completes Part B after hiring. After the employee's 12th consecutive month, the employer updates MyDORWAY, which issues a letter stating the credit amount — but that letter is not a guarantee of approval; the statutory requirements still have to be met. The credit amounts go on Schedule TC-65 filed with the return.

Stacking with other credits. The Veterans credit can be combined with other credits the employer qualifies for, such as the apprentice credit (§ 12-6-3477) and the Job Tax Credit (§ 12-6-3360). Chapter 6 credits can generally be applied in any order (§ 12-6-3480(3)), though the ruling's worked example shows it's often smart to apply carryforward-eligible, liability-limited credits (like the Job Tax Credit) before the non-carryforward Veterans credit to avoid wasting it.

What this means for you

Employers and small-business owners

If you run a registered apprenticeship (or can start one through Apprenticeship Carolina) and hire a recently discharged veteran into it, this is real money — up to $6,500 per veteran over three years. The practical checklist: confirm the DD-214 shows an honorable discharge or service-connected-disability release; confirm the hire is within three years of discharge and is a new employee; make sure the apprenticeship is DOL-registered; run the I-65 pre-screen and check MyDORWAY so you're not chasing a credit another employer already claimed. Remember the credit won't carry forward — in a low-liability year, some of it may be lost.

Accountants and tax professionals

Track the credit on the 12-consecutive-month clock, not the calendar or the apprenticeship's length (Q8). Watch the liability cap and no-carryforward rule together — the ruling's example (Years 1–3) shows why credit ordering matters when a client also has Job Tax and apprentice credits. Confirm which return the credit lands on (individual, C-corp, license, or bank tax) and that the once-per-employee rule is satisfied. Note SCDOR doesn't administer insurance premium taxes even though the credit statute lists them.

Everyone else

This is an employer hiring incentive tied to registered apprenticeships and veteran status — it doesn't change sales tax, property tax, or an individual's own income tax outside of the hiring context. It's included here for completeness of South Carolina's advisory-opinion library.

Common questions

Q: Who counts as a "veteran" for this credit?
A: A person who served on active duty in the U.S. Armed Forces (including reserve components and National Guard members called to active duty) and was honorably discharged or released due to a service-connected disability. A "general discharge under honorable conditions" does not qualify. The hire must occur within three years of discharge.

Q: How much is the credit and how long can I take it?
A: Up to $3,000 (year the employee hits 12 consecutive months), $2,500 (24 months), and $1,000 (36 months) — up to three years total, each year capped at your tax liability, only if the veteran stays employed.

Q: Is it refundable or can I carry it forward?
A: Neither. It's nonrefundable and has no carryforward; any amount over your liability in the earning year is forfeited.

Q: Can two employers both claim the credit for the same veteran?
A: No. The credit can be claimed only once per eligible employee, regardless of employer. Employers can check a prospective hire's status on MyDORWAY.

Q: What if the apprentice is part-time?
A: Two half-time apprentice-employees (each at least 20 hours/week) equal one full-time employee under the Job Tax Credit definitions, but both must complete 12 consecutive months before you can claim.

Q: How do I actually claim it?
A: The prospective hire completes Part A of Form I-65; you complete Part B after hiring. After the 12th consecutive month, update MyDORWAY (which issues a non-binding letter stating the amount) and report the credit on Schedule TC-65 with your return.

Citations and references

Statutes:

• S.C. Code Ann. § 12-6-3720 — the Veterans apprenticeship hiring credit (created by Act No. 237 of 2022, effective June 22, 2022): eligibility, $3,000/$2,500/$1,000 amounts, taxes offset, and the once-per-employee rule
• S.C. Code Ann. § 12-6-3360 — Job Tax Credit; supplies the full-time (≥35 hrs) and half-time (≥20 hrs) job definitions used here
• S.C. Code Ann. § 12-6-3477 — apprentice income tax credit (can be combined)
• S.C. Code Ann. § 12-6-3480(3) — Chapter 6 credits may generally be applied in any order
• S.C. Code Ann. § 12-6-510 (individual income tax) and § 12-6-530 (corporate income tax) — taxes the credit may offset
• 38 U.S.C. § 101(10) and (27) — federal definitions of "Armed Forces" and "reserve components"

Also referenced: 38 CFR § 3.1(k) (service-connected disability); the DD-214 (proof of service and discharge); Forms I-65 and Schedule TC-65; MyDORWAY; Apprenticeship Carolina and the U.S. DOL Office of Apprenticeship. The full text of § 12-6-3720 is attached to the ruling as an exhibit.

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR23-1.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214-0575

SC REVENUE RULING #23-1
SUBJECT:

South Carolina Tax Credit for Hiring Veterans
(Income, Corporate License, and Bank Tax)

EFFECTIVE DATE: June 22, 2022
REFERENCES:

S.C. Code Ann. § 12-6-3720 (Act No. 237 of 2022) (enacted June 22, 2022)

AUTHORITY:

S.C. Code Ann. § 12-4-320 (2014)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. 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 Department advisory opinion.

INTRODUCTION
S.C. Code Ann. § 12-6-3720 provides a tax credit for any taxpayer who hires a veteran of the
Armed Forces of the United States on or after June 22, 2022 and before January 1, 2027, to
participate in a registered apprenticeship program certified by the United States Department of
Labor. An employer may claim the credit for up to three years if all requirements of the statute are
met. The amount of the credit for each eligible employee is $3,000 for the first year of employment;
$2,500 for the second year of employment; and $1,000 for the third year of employment; but may
not exceed the taxpayer’s liability for that year.
The purpose of this advisory opinion is to provide an overview of and to address general questions
about this new South Carolina credit.
OVERVIEW OF THE VETERANS TAX CREDIT
An employer who hires a veteran of the Armed Forces of the United States as a new employee on
or after June 22, 2022, to participate in a registered apprenticeship program is eligible for this tax
credit. The credit is first earned in the year in which the veteran completes his/her first 12
consecutive months of employment after beginning the apprenticeship program. A partial month
does not count as a month. The amount of the credit is $3,000 for the first year in which the new
employee remains employed for 12 consecutive months. The credit amount changes to $2,500 for
1

the tax year in which the employee remains employed for 24 consecutive months and to $1,000
for the tax year in which the employee remains employed for 36 consecutive months. The credit
is not available if the individual was an employee of the employer prior to June 22, 2022.
The employer may only earn the credit for “veterans” hired on or prior to December 31, 2026,
although the credit may be claimed after that date on the same schedule and in the same amount
as provided in the statute. The credit may be used against individual income taxes, corporate
income taxes, corporate license taxes, bank franchise taxes, income taxes imposed on building and
loan associations, and insurance premium taxes.
S.C. Code Ann. § 12-6-3720 1 defines “veteran” as “a person who served on active duty in the
Armed Forces of the United States and who, within three years of being hired in a qualifying
apprenticeship program, was honorably discharged or released from such service due to a serviceconnected disability.”
QUESTIONS AND ANSWERS
PART 1 – VETERAN OF THE ARMED FORCES OF THE UNITED STATES

1. Q. Who is considered a “veteran of the Armed Forces of the United States” for the purpose of
   this credit?
   A. The term “Armed Forces” means the United States Army, Navy, Marine Corps, Air Force,
   Space Force, and Coast Guard, including the reserve components thereof. 38 U.S.C. §
   101(10).
   With respect to the Armed Forces, “reserve components” means the Army Reserve, the
   Navy Reserve, the Marine Corps Reserve, the Air Force Reserve, the Space Force Reserve,
   the Coast Guard Reserve, the Army National Guard of the United States, and the Air
   National Guard of the United States. 38 U.S.C. § 101(27).
   Therefore, a veteran of the Armed Forces of the United States is a person who served on
   active duty in any aforementioned branch of the armed services so long as the person was
   either honorably discharged or released from service due to a service-connected disability.
   For example, a member of the Air National Guard who has been called to active duty,
   suffers a disabling injury that was incurred or aggravated in the line of duty, resulting in
   his/her release from the National Guard, and within three years of release is hired for a
   qualified apprenticeship program is a veteran of the Armed Forces of the United States for
   purposes of this credit.

1

For reference, S.C. Code Ann. § 12-6-3720 is attached.
2

2. Q. What constitutes an honorable discharge?
A. There are several types of military discharge. The honorable discharge is the best discharge
a military member can receive. Honorable discharge is an indication that the individual
performed well and completed his/her service obligations. An honorable discharge is not
the same as a “general discharge under honorable conditions,” which is a lower level of
discharge and does not meet the requirements of being honorably discharged. The
employer should confirm the type of military discharge of any potential employee by
reviewing the potential employee’s DD-214, which is the document issued by the
Department of Defense that proves the military service and discharge.

3. Q. What is a release from service due to a service-connected disability?
   A. Not all medical discharges or releases are “due to a service-connected disability.” To
   qualify as a service connected disability the “disability was incurred or aggravated… in
   line of duty in the active military, naval, air, or space service.” 38 CFR § 3.1(k). The
   employer should confirm the circumstance of release of any potential employee by
   reviewing the potential employee’s DD-214, which is the document issued by the
   Department of Defense that proves the military service and discharge.
4. Q. Is an employer eligible for the credit if it hires a member of the National Guard who never
   served on active duty?
   A. No. If a member of the National Guard is never called for active duty, he/she is not
   considered a veteran for purposes of this credit. Even if a former member of the National
   Guard served on active duty, the former member is not a veteran for purposes of the credit
   if the active duty service ended more than three years before the date of hire.
5. Q. What is the eligible hiring period for employers who want to earn the credit?
   A. An employer must hire a veteran on or after June 22, 2022, and on or prior to December
   31, 2026, to qualify for the credit. Moreover, the veteran must be hired within three years
   of his/her discharge from the armed forces.
6. Q. If an employer meets all the requirements and claims the credit, can a second employer
   hire the same veteran and claim the credit?
   A. No. The credit may only be claimed once for an eligible employee, regardless of the
   employer. See Question 12 below for instructions regarding how to determine if a previous
   employer has claimed the credit. A second employer is ineligible to claim the credit even
   if the first employer claimed the credit for only one or two years.
   PART 2 – REGISTERED APPRENTICESHIP PROGRAM
7. Q. What is a “registered apprenticeship program that has been validated by the United States
   Department of Labor”?

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A. Registered apprenticeships are industry-vetted and approved programs with jobs that pay
progressive wages as the employee’s skills and productivity increases. They provide
structured on-the-job training which includes instruction from an experienced mentor. For
more information about registered apprenticeship programs, consult Apprenticeship
Carolina (apprenticeshipcarolina.com), which is a division of the South Carolina Technical
College System. For more information about the Department of Labor’s validation of
apprenticeship programs, consult Apprenticeship USA (apprenticeship.gov) or the
Department of Labor’s Office of Apprenticeship located at 1835 Assembly Street in
Columbia.

8. Q. Must the apprenticeship program last for three years in order for the employer to qualify
   for all three years of the tax credit?
   A. No. Credit qualification is determined annually based upon consecutive months of
   employment; it is not dependent on the length of the apprenticeship program itself. The
   appropriate term of the apprenticeship program should be determined by the employer with
   guidance from Apprenticeship Carolina and the Department of Labor.
9. Q: May an employee participate in an apprenticeship remotely?
   A: To earn the credit, an employer must hire a veteran as a new employee in a registered
   apprenticeship program that has been validated by the Department of Labor. According to
   the Department of Labor’s website, “Apprenticeships produce skilled workers through a
   combination of on-the-job learning and classroom training (virtual or in-person).”
   Therefore, an employee could participate in part of the apprenticeship remotely. The
   apprenticeship program must be validated by the Department of Labor, so its standards
   control the extent to which the apprenticeship might be accomplished by virtual
   participation.
10. Q. Can an employer qualify for the credit with two half-time apprentice-employees instead of
    one full-time apprentice-employee?
    A: Yes. Subsection (H) of S.C. Code Ann. § 12-6-3720 states that “full-time” has the same
    meaning as provided in S.C. Code Ann. § 12-6-3360, the Job Tax Credit statute. The Job
    Tax Credit states that two half-time jobs are considered one full-time job. S.C. Code Ann.
    § 12-6-3360(M)(4). A “half-time job” is a job requiring a minimum of twenty hours of an
    employee's time a week for the entire normal year of the company's operations. A “fulltime job” is one that requires a minimum of thirty-five hours of an employee's time a week
    for the entire normal year of company operations. Because two half-time employees equal
    one full-time employee under the Job Tax Credit, two half-time apprentice-employees can
    qualify for one full-time apprentice-employee under this credit. However, both apprenticeemployees who hold a half-time apprenticeship must be employed for 12 consecutive,
    complete months before an employer will be eligible for the credit. In other words, if one
    half-time employee was hired before the second half-time employee, the employer is not
    eligible for the credit until the second employee has also worked for 12 consecutive
    months.

4

PART 3 – HOW TO CLAIM THE CREDIT

11. Q. When does an employer become eligible for the credit?
    A. An employer becomes eligible for the credit in the tax year in which the new employee
    completes his/her twelfth consecutive month of employment. If there is a delay between
    the employment start date and the start date of the apprenticeship program, the employer
    still becomes eligible for the credit after the twelfth full month of employment provided
    the employee was newly hired into the apprenticeship program.
12. Q. How does an employer claim the credit?
    A. An employer can confirm the eligibility of a potential employee once the potential
    employee has completed Part A of the Pre-Screening for Veterans Apprenticeship Credit
    form (I-65). The employer can check the potential employee’s status on MyDORWAY at
    dor.sc.gov to confirm that no other employer has previously claimed the credit for this
    employee.
    If the employer hires the prospective employee, the employer should complete Part B of
    Form I-65.
    At the end of the tax year in which an employee completes the twelfth consecutive month
    of employment, the employer should return to MyDORWAY and complete the information
    necessary to show he/she has fulfilled the credit’s requirements. MyDORWAY will then
    send a letter to the employer explaining the amount of the credit based upon the information
    the employer provided. 2 The credit amounts for each eligible employee should be entered
    on the Veterans Apprenticeship Credit form (SC SCH.TC-65) and submitted with the
    employer’s tax return.
13. Q. If an employer receives the letter from the Department explaining the amount of the credit,
    is the employer assured of getting the credit?
    A. No. The letter from the Department, which is issued through MyDORWAY, is a statement
    of the amount of the credit based on information provided by the employer. This letter is
    not guaranteed approval of the credit. The statutory requirements must be met for the credit
    to be properly claimed, and the employer is responsible for entering accurate information
    into MyDORWAY.
    PART 4 - OTHER ISSUES
14. Q. What is the amount of the credit?
    A. For each eligible veteran still employed 12 consecutive months after beginning the
    apprenticeship program, the employer will qualify for a credit of up to $3,000 for that
    veteran for that tax year. If the veteran is still employed after 24 months, the employer will
    2

The letter from MyDORWAY does not guarantee that the employer qualifies for the credit. See
Question 13 for further discussion.
5

qualify for a credit of up to $2,500 for that veteran in the second tax year. If the veteran is
still employed after 36 months, the employer will qualify for a credit of up to $1,000 for
that veteran in the third tax year. The yearly aggregate amount of the credit is limited by
the employer’s tax liability.

15. Q. Which taxes may be offset by this credit?
    A. The credit may be claimed against individual income tax (S.C. Code Ann. § 12-6-510),
    corporate income tax (S.C. Code Ann. § 12-6-530), corporate license tax (S.C. Code Ann.
    Chapter 20, Title 12), bank franchise tax (S.C. Code Ann. Chapter 11, Title 12), income
    tax imposed on building and loan associations (S.C. Code Ann. Chapter 13, Title 12), and
    insurance premium taxes (S.C. Code Ann. Chapter 7, Title 38) 3. S.C. Code Ann. § 12-63720(B).
16. Q. Are there limits on the amount of the credit?
    A. Yes. The aggregate amount of the credit for all eligible employees in a taxable year may
    not exceed the taxpayer’s tax liability for that year.
17. Q. Can unused credit amounts be carried forward?
    A. No. There is no carry forward provision for the credit, so any unused credit amounts may
    not be applied to a succeeding year’s liability. If the credit is not fully used in the applicable
    year, it is forfeited.
18. Q. How many years can an employer take the credit?
    A. Three. There is no credit after an employee’s third year of employment. The employer
    cannot take the credit in all three years unless the eligible employee remains employed for
    the entire period.
19. Q. Is the credit refundable?
    A. No. The credit is not refundable.
20. Q. Can an employer claim the credit for hiring a veteran and also claim other credits?
    A. Yes, an employer can claim the credit for hiring a veteran and combine it with other credits
    if the employer meets the requirements for the additional credits. Unless otherwise
    provided in the particular credit statute, a taxpayer may apply Chapter 6 tax credits in any
    order. S.C. Code Ann. § 12-6-3480(3). 4

3

SCDOR does not administer insurance premium taxes.
S.C. Code Ann. §§ 12-6-3477, 12-6-3710, and 12-6-3360 do not require taxpayers to apply
these credits in any particular order.

4

6

Example
Employer X is a taxpayer with a manufacturing facility in a multicounty industrial park in
a Tier II County. Employee A is hired for a full-time job at X’s facility, starting with an
apprenticeship program that was approved by the United States Department of Labor.
Employee A begins employment on the first day of Year 1 and works for 36 consecutive
months. Employee A qualifies as a veteran of the Armed Forces of the United States so
that Employer X is eligible for the tax credit for hiring a veteran for an apprenticeship
program (Veteran credit) pursuant to S.C. Code Ann. § 12-36-3720.
Employee A’s employment also makes Employer X eligible for the apprentice income tax
credit (Apprenticeship credit) equal to $1,000 a year for four years pursuant to S.C. Code
Ann. § 12-6-3477. Additionally, in Year 1, by hiring Employee A, Employer X generates
a traditional annual job tax credit (Job Tax credit) pursuant to S.C. Code Ann. 12-63360(C)(1) equal to $3,750 ($2,750 plus an additional $1,000 credit because the facility is
located in a multicounty industrial park). The Job Tax credit cannot be claimed until Year
2 and is limited each year to 50% of tax liability. S.C. Code Ann. § 12-6-3360. In Year 2,
Employer X generates another Job Tax credit equal to $3,750, which can be claimed in
Year 3. The following chart reflects X’s tax liability for Year 1 through Year 3:
Year 1
$2,500
3,000
1,000
0
$0

Tax Liability
Veteran credit
Apprenticeship credit
Job Tax credit
Final Tax Liability

In Year 1, Employer X earns a Veteran credit equal to $3,000 and an Apprenticeship credit
equal to $1,000. Employer X’s tax liability is only $2,500, so the Veteran credit will reduce
the liability to $0. The remaining $500 of the Veteran credit and the $1,000 of the
Apprenticeship credit will be lost because they cannot be carried forward to the following
year. 5
Year 2
$7,000
3,750
2,500
1,000
$0

Tax liability
Job Tax credit
Veteran credit
Apprenticeship credit
Final Tax Liability

5

The example demonstrates that the Veterans credit is applied first, but the order of applying the
available tax credits will not affect Employer X’s tax liability for Year 1 because neither credit is
limited or able to be carried forward. If the Apprenticeship credit is applied first, Employer X’s
liability is reduced to $1,500. The $3,000 Veterans credit is then applied to reduce the remaining
liability to zero. The $1,500 of Veterans unused credit will be lost.
7

In Year 2, it will benefit Employer X to apply the Job Tax credit first because it is limited
to 50% of the tax liability and unused amounts may also be carried forward. Applying
$3,500 of the available $3,750 Job Tax credit 6 reduces Employer X’s tax liability before
the Veteran credit and the Apprenticeship credit are applied from $7,000 to $3,500. The
remaining $250 of the Job Tax credit may be carried forward to Year 3. The $2,500
Veterans credit and the $1,000 Apprenticeship credit can be applied in any order to reduce
Employer X’s final tax liability to $0.
Year 3
$12,000
1,000
1,000
4,000 (3,750 plus 250 carry
forward from Year 2)
$6,000

Tax Liability
Veteran credit
Apprenticeship credit
Job Tax credit
Final Tax Liability

In Year 3, the order of applying tax credits will not affect Employer X’s tax liability. The
Veteran credit of $1,000 and the Apprenticeship credit of $1,000 will reduce Employer X’s
tax liability to $10,000 and the limit for the Job Tax credit to $5,000, allowing all of the
$4,000 Job Tax credit to be applied to reduce Employer X’s tax liability to $6,000.
Alternatively, Employer X could apply the $4,000 Job Tax credit first, reducing his or her
tax liability to $8,000, and then apply the Veteran credit of $1,000 and the Apprenticeship
credit of $1,000 to reduce Employer X’s tax liability to $6,000. However, because the
Apprenticeship credit and the Veteran credit cannot be carried forward, the taxpayer will
usually benefit from applying these credits first.

21. Q. If an employer hires a veteran who works for less than one year but returns to work after a
    separation in service and works for a total of one year, may the employer claim the credit?
    A. No. An employer may only claim the credit if the veteran is a new employee and works for
    twelve consecutive months.
22. Q. May an employer claim the credit if the veteran begins his employment as a half-time
    employee but is then made a full-time employee?
    A: Yes, the employer may claim the credit. However, while a half-time employee, the veteran
    may only be counted as half of an employee for purposes of this credit. The employer may
    only claim the credit if there is another half-time employee to pair with the first half-time
    employee. The statute does not allow an employer to earn half of the credit with one halftime employee. Additionally, the credit will not be earned until the new employee works
    in a full-time capacity for 12 consecutive months.

6

The Job Tax credit amount is limited to 50% of Employer X’s tax liability.
8

23. Q. Can an employer qualify for the credit with leased employees?
A. No. Leased employees or other employees of another company who are on the payroll of
that company, such as a temporary employment agency or professional employer
organization, will not qualify as an employer for the Veteran credit. Only employees of the
employer will count toward the credit (i.e., employees subject to withholding by the
employer.) If, however, an employer subsequently hires employees who were previously
leased, then they are considered new employees who can be counted toward the Veteran
credit if all other statutory requirements are met.

24. Q. Can the employer qualify for the credit if the veteran takes one month of leave during his
    first year of employment pursuant to the Family Medical Leave Act (FMLA)?
    A. Yes. Because the veteran remains employed while he/she is on leave pursuant to FMLA,
    the month he/she is on leave will be counted toward the consecutive month requirement
    for the Veteran credit.
    SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
August 14 ______, 2023
Columbia, South Carolina

9

S.C. Code Ann. § 12-6-3720
Income tax credit for taxpayers that hire veterans; eligibility; regulations; definitions.
(A)
For tax years beginning after 2021, there is allowed a tax credit for any taxpayer that hires
a veteran of the Armed Forces of the United States, after 2021 but before 2027, as a new employee
in a registered apprenticeship program that has been validated by the United States Department of
Labor. An employer who has one or more eligible employees is eligible to apply for and receive a
credit against the taxes set forth in subsection (B). In the first year in which the credit is earned
pursuant to subsection (D), the amount of the credit is three thousand dollars for each eligible
employee. If the eligible employee remains employed and otherwise meets the requirements of
this section thereafter, the credit is two thousand five hundred dollars in the second year, and one
thousand dollars in the third year. The credit may not be claimed beyond the third year.
(B)
The credit allowed pursuant to this section may be taken against the income taxes imposed
pursuant to this chapter, the bank tax imposed pursuant to Chapter 11 of this title, the savings and
loan association tax imposed pursuant to Chapter 13 of this title, the corporate license tax imposed
pursuant to Chapter 20 of this title, and insurance premium taxes imposed pursuant to Chapter 7,
Title 38.
(C)
The total amount of the tax credit for a taxable year may not exceed the taxpayer's tax
liability. Any unused credit may not be carried over to apply to the taxpayer's succeeding year's
liability.
(D)

(1)
The tax credit is earned in the year in which the veteran first completes the twelfth
consecutive month of employment with the taxpayer. The credit is earned in the same
manner and on the same schedule in the second and third year of employment.
(2)
The tax credit allowed by this section only may be claimed for an eligible individual
once, regardless of the employer. The department shall consult with the Department of
Commerce, Apprenticeship Carolina of the South Carolina Technical College System, and
any other agency or department necessary to establish a process by which employers are
aware of an individual's eligibility for the credit allowed by this section.

(E)
Notwithstanding any other provision of this section, the credit allowed by this section only
may be claimed if the veteran is hired, after 2021 but before 2027, by the employer as a new
employee in the registered apprenticeship program. If the individual is employed before 2027, then
the employer may claim the credit for each year the individual is eligible and on the same schedule
as provided in this section.
(F)
The department may prescribe forms and promulgate regulations necessary to implement
the provisions of this section, including requiring the necessary documentation to prove eligibility.
(G)
Nothing in this section may be construed to allow an employer to claim this credit for a
veteran if the veteran was hired before the effective date of this section.
(H)

For purposes of this section:
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(1)

“Full-time” has the same meaning as provided in Section 12-6-3360.

(2)

“Veteran” means a person who served on active duty in the Armed Forces of the
United States and who, within three years of being hired in a qualifying
apprenticeship program, was honorably discharged or released from such service
due to a service-connected disability.

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