South Carolina R&D Tax Credit: Key Benefits for Businesses

South Carolina and the R&D Tax Credit

State Credit Name: Qualified Research and Development Tax Credit

Expiration Date: Indefinite

Who Can Apply? Corporations and flow-through entities

Credit Carry Forward: Unused credit can be carried forward 10 years.

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Special Notes: The credit rate is 5% of the QRE’s that occurred in South Carolina. The credit cannot exceed 50% of a taxpayer’s liability.

The South Carolina research credit is based off of IRC Section 41 regarding qualified expenditures.

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Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed’s office location at 4000 South Faber Place Drive, Charleston, South Carolina provides R&D tax credit consulting and advisory services to Columbia, Charleston, North Charleston, Mount Pleasant, Rock Hill, Greenville, Summerville, Sumter, Hilton Head Island and Spartanburg.

If you have any questions or need further assistance, please call or email our local South Carolina Partner on (843) 459-7912.
Feel free to book a quick teleconference with one of our South Carolina R&D tax credit specialists at a time that is convenient for you. Click here for more information about R&D tax credit management and implementation.

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South Carolina R&D Tax Credit Filing Instructions

To claim the Research and Development (R&D) tax credit in South Carolina, businesses must first claim the federal R&D tax credit (pursuant to IRC § 41) for increasing research activities in the same taxable year. The South Carolina R&D credit is equal to 5% of the qualified research expenditures incurred within the state. This credit can be applied against corporate income tax and corporate license fees. It’s important to note that the credit claimed in any given tax year cannot exceed 50% of the company’s tax liability remaining after all other credits have been applied. Any unused portion of the credit can be carried forward for up to ten years. To make the claim, businesses must file SC Schedule TC-18, Research Expenses Credit, along with their annual South Carolina state tax return. This form requires details on South Carolina qualified research expenses, any credit carried forward from previous years, and the total credit before limitations.

R&D Tax Credit Training for SC CPAs

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R&D Tax Credit Training for SC CFPs

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R&D Tax Credit Training for SC SMBs

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South Carolina Patent of the Year – 2024/2025

Heatworks Technologies Inc. has been awarded the 2024/2025 Patent of the Year for revolutionizing fluid heating in household appliances. Their invention, detailed in U.S. Patent No. 12156624, titled ‘Dynamic fluid heater and washing appliance’, introduces a high-efficiency, compact heating system that rapidly warms water without traditional metal elements.

The patented system utilizes an intermediate liquid circulation path and a target fluid flow path, each thermally communicating via a heat exchanger. This design allows for precise, on-demand heating, making it ideal for portable dishwashers and other compact appliances. The system’s heater delivers at least 5 watts of heat per cubic centimeter, ensuring quick and consistent water temperatures.

Unlike conventional methods that rely on metal heating elements, Heatworks’ approach minimizes energy loss and reduces scaling issues. This innovation not only enhances appliance performance but also contributes to energy conservation and sustainability in everyday household tasks.

By integrating this advanced heating technology, Heatworks is setting new standards for efficiency and environmental responsibility in home appliances, paving the way for smarter, greener living solutions.