Lee Rogers

120,000 Claim New Tax Credit

Motor fuel income tax credit

May 14, 2019 - 11:19 am

More than 120,000 South Carolina taxpayers have taken advantage of the state's first motor fuel income tax credit, receiving $1.8 million in credits, according to preliminary figures. 

South Carolina Department of Revenue (SCDOR) data as of May 3 shows 120,585 taxpayers have received $1,834,727 in motor fuel income tax credits, well below the $40 million cap set by lawmakers for the credit's first year.

The motor fuel income tax credit went into effect in January 2018 to offset the increased motor fuel user fee established by lawmakers in the South Carolina Infrastructure and Economic Development Reform Act. The $.02 per gallon increase began on July 1, 2017 and will increase by the same amount every year on July 1 until 2022.

"We're pleased more than 120,000 taxpayers benefitted from the motor fuel income tax credit during its first year," said SCDOR Director Hartley Powell. "This credit allows taxpayers to receive a benefit for the increased fee they pay at the pump. We expect more taxpayers to file for this credit as the fee increases again next year."

The data is preliminary because taxpayers filing extensions have until October 15 to file their returns.

The $1.8 million in credits was claimed in 77,744 returns. The credits amount to 4.5% of the 2018 cap, which increases in 2019 to $65 million.

According to the data, the group that filed for motor fuel income tax credits includes: 43,011 married couples filing joint returns; 22,902 single taxpayers; 2,355 married couples filing single returns; 9,262 head of household returns.

The average credit per return was $23.65, while the average per taxpayer was $15.21, according to the data. The average credit is expected to rise next year because of the increased motor fuel user fee that goes into effect this summer. 

Eligible taxpayers can get a credit on the lesser of the increase in the motor fuel user fee, which is paid when you purchase gas, or preventative maintenance costs during the same year.

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