SC SCH TC 46: Bank Tax Credit for S Corporation Shareholders (Revision 2020-06)
South Carolina · South Carolina DOR · Used for tax years 2024, 2025, 2026
South Carolina Schedule TC-46 calculates the Individual Income Tax credit for shareholders of banks with a valid federal Subchapter S election. It compares tax liability with and without the shareholder's prorata bank income or loss and limits the credit to the shareholder's pror
Who files this form
SC SCH.TC-46 is for taxpayers claiming the credit for shareholders in a bank that has a valid federal Subchapter S election.
The credit is based on the difference between your Individual Income Tax after other credits with and without your prorata share of the bank’s income and expenses. It cannot exceed your prorata share of the S Corporation’s Bank Tax.
What you'll need
Have these forms and details available:
- Your name and Social Security Number. Individual taxpayers must provide their Social Security Number.
- Your SC1040, including the tax amounts on lines 6 and 8.
- The total of all other allowable credits you claimed for the tax year.
- The bank’s net income items or income and expenses, your ownership percentage, and the South Carolina Bank Tax owed and paid by the S Corporation.
- A separate hypothetical South Carolina return that excludes your prorata net income or loss from the bank.
- A hypothetical I-335 if you elected to complete an actual I-335 with your return.
- SC1040TC, where you enter the allowable credit.
How to file
- Enter your current-year taxes and other allowable credits on lines 1 through 5.
- Enter the bank’s income information and your ownership percentage on lines 6 and 7. Round the ownership percentage to the fourth decimal place. Calculate your prorata net income or loss on line 8.
- Before completing lines 9 through 13, prepare a separate hypothetical South Carolina return excluding the amount on line 8. Use it to recalculate your taxes and other allowable credits.
- Calculate the tentative credit on line 14 and your prorata share of Bank Tax on line 16. Enter the lesser amount on line 17, then enter that allowable credit on SC1040TC.
Paper filing: Attach SC SCH.TC-46 to your Income Tax return.
Electronic filing: Keep a copy with your tax records.
Keep the hypothetical return with your tax records.
Common mistakes
- Completing lines 9 through 13 before preparing the required hypothetical return.
- Failing to keep the hypothetical return with your tax records.
- Skipping the hypothetical I-335 when you elected to complete an actual I-335 with your return.
- Claiming more than your prorata share of the S Corporation’s Bank Tax. Line 17 must be the lesser of line 14 or line 16.
- Leaving out your Social Security Number if you are an individual taxpayer.
- Forgetting to attach the schedule when filing on paper, or to keep a copy when filing electronically.
Questions people ask
Does Individual Income Tax include tax on active trade or business income?
Yes. For this credit, Individual Income Tax includes both tax imposed on the individual and tax on active trade or business income.
What is the hypothetical return for?
It recalculates your South Carolina tax liability without your prorata net income or loss from the bank. You must complete it before filling out lines 9 through 13 and keep it with your tax records.
Do I need a hypothetical I-335?
Yes, if you elected to complete an actual I-335 with your return. Use the hypothetical I-335 to recalculate the tax on active trade or business income without your prorata net income or loss from the bank.
Where do I report the allowable credit?
Enter the lesser of line 14 or line 16 on line 17 of SC SCH.TC-46. Then enter that amount on SC1040TC.