SC SCH TC 3: Water Resources Credit (Revision 2019-08)
South Carolina · South Carolina DOR · Used for tax years 2024, 2025, 2026
South Carolina Schedule TC-3 calculates the Water Resources Credit for allowable costs of constructing, installing, or restoring ponds, lakes, water impoundments, and water control structures. The income tax credit is 25% of allowable expenditures, limited to $2,500.
Who files this form
Use SC SCH.TC-3 to claim the Water Resources Credit for allowable construction, installation, or restoration costs for ponds, lakes, other water impoundments, and water control structures.
The structures must be designed for water storage for irrigation, water supply, sediment control, erosion control, aquiculture, or wildlife management.
The credit does not apply to structures located in or adjacent to, and filled primarily by, South Carolina coastal waters.
What you'll need
The form requires one of these attachments:
- A construction permit issued by the South Carolina Department of Health and Environmental Control (SCDHEC).
- Proof of permit exemption issued by SCDHEC, the Natural Resources Conservation Service, or a local Soil and Water Conservation District.
You will also need your name, SSN or FEIN, the property's street address, city, county, state and ZIP code, and the amounts of allowable construction, installation, and restoration costs. Individual taxpayers must provide their Social Security Number.
How to file
- Enter construction and installation costs on line 1 and allowable restoration costs on line 2.
- Add those costs on line 3, then multiply the total by 25% on line 4.
- On line 6, enter the smaller of line 4 or the $2,500 limit on line 5. Also enter that amount on the appropriate tax credit schedule.
- Attach the required construction permit or proof of permit exemption.
If you file by paper, attach SC SCH.TC-3 to your Income Tax return. If you file electronically, keep a copy with your tax records.
Common mistakes
- Leaving out the required construction permit or proof of permit exemption.
- Claiming the credit for a structure located in or adjacent to, and filled primarily by, South Carolina coastal waters. These structures do not qualify.
- Including excluded upkeep as restoration costs. Examples include cutting grass, reseeding eroded areas, removing brush or trees up to four inches in diameter from a dam, sealing cracks in spillway slabs, and replacing trash guards.
- Including repairs or replacements to water supply or irrigation components that are not part of the dam, water impoundment, or their appurtenant works.
- Omitting your Social Security Number if you are an individual taxpayer.
- Forgetting to attach the form to a paper Income Tax return or keep a copy with your tax records when filing electronically.
Questions people ask
How much is the credit?
The credit is 25% of allowable expenditures, limited to $2,500.
How does the limit apply to pass-through entities?
The $2,500 maximum is determined at the entity level.
What if the credit is more than my tax liability?
The excess may be carried forward for the next five taxable years.
What work counts as restoration?
Restoration includes materials and services for work such as changing a dam's height, increasing spillway capacity, removing sediment from an impoundment, adjusting water depth for aquiculture or wildlife management, and installing a filter or drainage system to control seepage through a dam. It also includes work to improve a water impoundment's or water control structure's capacity, service, or safety. Routine care and other specifically excluded work do not count.