Because inactive duty military reserve income is taxed for federal purposes but deductible on your South Carolina return, you must add back the amount of the federal deduction for expenses related to this income. Enter the amount of these expenses here.

Out-Of-State Losses

If you have reported losses from out-of-state rental property, a business located outside South Carolina, or losses from real property located out of state, enter the amount shown on your federal below. You must also include any related expenses, such as investment interest. Enter the total of these losses and related expenses below.

Personal service income (W-2 or business wages) is taxable to South Carolina no matter where it is earned.

Other Additions

Enter any expnses deducted on your federal return related to any income exempt or not taxed by South Carolina is an addition. Some examples are:

• Taxpayers that claim 30% or 50% bonus depreciation under federal law must add back the difference between the bonus depreciation taken and the depreciation which would have been allowed without bonus depreciation.
• Taxpayers that claim a child care program credit for donations to a nonprofit corporation (Sch. TC-9) are not allowed a deduction for those donations. The disallowed deductions are an addition to federal taxable income.
• Taxpayers that claim a credit for wages paid to employees terminated due to a base closure (Sch. TC-10) must reduce the deduction for wages paid by the amount of the credit. The amount of this credit is an addition to federal taxable income.
• Federal net operating loss when claiming a different amount for state purposes is an addition. In no event is the same loss to be deducted more than once. No carryback losses are allowed.
• Expenses deducted on the federal return related to any income exempt or not taxed by South Carolina is an addition. Some examples are investment interest to out-of-state partnerships and interest paid to purchase United States obligations.
• Foreign areas allowances, cost of living allowances and/or income from possessions of the United States are additions to federal taxable income.
• Annuity costs recovered in full for state purposes are additions to federal taxable income if using the federal ratio for cost recovery.
• Miscellaneous federal estate tax deductions on income in respect of decedent are additions.
• Effective for qualifying investments made after June 30, 1998, taxpayers must reduce the basis of the qualifying property to the extent the Economic Impact Zone Investment Tax Credit is claimed. An addition to federal taxable income must be made for the resulting reduction in depreciation.

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