South Carolina donors can claim tax credits for eligible charities

Donors can claim approved credits against South Carolina income taxes for cash gifts to eligible charities. Taxpayers making voluntary cash gifts qualify. Businesses that pass income through to their owners divide credits by ownership share or a written agreement. The credit cannot exceed half of the donor’s income tax bill and cannot produce a refund. Unused credits can carry forward for five consecutive years after the tax year when they were earned.

Charities must meet eligibility rules and receive approval from the South Carolina Department of Revenue. Eligible groups must be federally tax-exempt pregnancy resource centers, crisis pregnancy centers, maternity homes, or residential programs for human trafficking victims. They must provide services supporting child welfare, adoption, or carrying pregnancies to term and healthy childbirth. They must certify that no more than 20% of donations under this law will pay administrative expenses. They cannot provide, pay for, or cover abortions, or financially support another entity that does. They must file public federal tax filings with the Secretary of State annually, report eligibility changes, and submit yearly certifications signed by an officer under penalty of perjury to the Department of Revenue. Each yearly renewal requires the previous tax year’s donation count and total, plus an accounting firm’s compilation, review, or compliance audit of financial statements relating to grants received.

The South Carolina Department of Revenue assigns credits within yearly limits and publishes a list of approved charities. The department can assign no more than $3.5 million in credits per calendar year. Donors must apply and report the charity’s name and donation amount. Within 30 days of receiving an application, the department must assign credits or notify the donor how much is available under the yearly cap. Donations to one charity normally cannot receive more than 25% of credits allocated that year. Credits not allocated before June 1, 2026, can bypass this limit for 2026. A promised gift must be made within 60 days of credit assignment or the assignment is canceled. A smaller actual gift reduces the allowed credit. The law took effect May 18, 2026, and first applies to tax years beginning after 2024. It is repealed December 31, 2030, except that credits earned before repeal retain the five-year carryforward rule.