SC SCH TC 56: Angel Investor Credit (Revision 2024-05)
South Carolina · South Carolina DOR · Used for tax years 2024, 2025, 2026
South Carolina Schedule TC-56 calculates the nonrefundable Angel Investor Credit for qualified investments in qualified businesses. It reports credit earned, transferred, carried forward, and available to apply against your current year Income Tax liability.
Who files this form
Use SC SCH.TC-56 to calculate the Angel Investor Credit available for the tax year, including prior-year and transferred credits.
Do not file TC-56 unless you have filed an Application for Angel Investor Credit and received tentative approval from the South Carolina Department of Revenue (SCDOR).
- Only individual taxpayers complete lines 1 through 8.
- All taxpayers complete lines 9 through 17.
- Only individuals may claim credits passed through by an S Corporation, Partnership, or LLC.
- Unused credits may be transferred to any taxpayer, subject to the transfer limits.
When it's due
Apply for tentative approval in the tax year the credit is claimed or allowed.
The SCDOR will notify applicants of tentatively approved and allocated credits by January 31 of the following year, meaning the year after the tax year for which approval was requested. This is a notification date, not a tax return filing deadline.
The text does not give a filing deadline for TC-56.
What you'll need
Have these documents and details available:
- Your Angel Investor Credit Approval Notice from the SCDOR showing the tentatively approved credit amount.
- Your name and SSN or FEIN. Individual taxpayers must provide their SSN.
- SC K-1s showing credits passed through from S Corporations, Partnerships, and LLCs. Include copies with a paper return and include SC K-1 documentation with any transfer requests.
- Amounts of unused prior-year credits, credits transferred to or from you, and credits expiring this year.
- Your net South Carolina Income Tax liability, after the other credits specified in the form's instructions.
How to file
- Submit the Application for Angel Investor Credit through the SCDOR's online portal at MyDORWAY.dor.sc.gov.
- Wait for the SCDOR's Angel Investor Credit Approval Notice before claiming the credit on your tax return.
- Complete TC-56. Individuals complete lines 1 through 8, and all taxpayers complete lines 9 through 17.
If filing by paper: Attach TC-56 to your Income Tax return. Include SC K-1s showing any passed-through credits. The text does not provide a mailing address.
If filing electronically: Keep a copy of TC-56 with your tax records.
Common mistakes
- Claiming the credit before approval. Do not claim it without the SCDOR's Angel Investor Credit Approval Notice.
- Completing the wrong lines. Lines 1 through 8 are for individual taxpayers only. All taxpayers complete lines 9 through 17.
- Leaving out SC K-1s when filing on paper. Include copies showing credits passed through from all S Corporations, Partnerships, and LLCs.
- Keeping credits beyond the carryforward limit. Unused credits may be carried forward for only 10 years from the end of the tax year the qualified investment was made.
- Transferring the same credit more than once. A credit, or any part of it, may be transferred only once.
- Forgetting transfers made on your behalf. Include credits transferred by an S Corporation, Partnership, or LLC when reporting credits you transferred to another taxpayer.
Questions people ask
How much is the Angel Investor Credit?
The credit is a nonrefundable Income Tax credit equal to 35% of qualified investments made in a qualified business between 2013 and 2025. An individual can earn no more than $100,000 in a single tax year, including direct investments and credits allocated by pass-through entities.
Can I use the entire credit in the investment year?
No. You may apply 50% of the allowed credit to your net Income Tax liability in the year the qualified investment is made. The remaining 50% may be applied in later tax years. Your current-year credit cannot exceed your net Income Tax liability.
What happens to credit I do not use?
Unused credit may be carried forward for 10 years from the end of the tax year in which the qualified investment was made.
Can I transfer unused credit to someone else?
Yes. Unused credits may be sold, exchanged, or otherwise transferred to any taxpayer. A credit, or part of a credit, may be transferred only once. The recipient may use the transferred credit for the tax year in which the transfer occurred.