SC SCH TC 58: Solar Energy Property Credit (Revision 2022-07)

Who files this form

Use SC SCH TC-58 to claim the Solar Energy Property Credit if you construct, purchase, or lease qualifying nonresidential solar energy property located and placed in service in South Carolina.

The property must be on one of these qualifying sites:

• The EPA’s National Priority List or National Priority List Equivalent Sites.
• A list of related removal actions certified by the Department of Health and Environmental Control (DHEC).
• Land subject to a Voluntary Cleanup Contract with DHEC or corrective action under the Federal Resource Conservation and Recovery Act of 1976.
• Land owned by the Pinewood Site Custodial Trust.

For property placed in service after 2019, partnerships and LLCs taxed as partnerships may pass the credit through to partners or members. Recipients also use this schedule to report their credit.

What you'll need

Have these documents and details ready:

• Your name and SSN or FEIN. Individual taxpayers must provide their Social Security Number.
• A copy of your SCDOR credit approval letter, unless you receive the credit from a pass-through entity.
• The total cost of the solar energy property for the initial credit calculation.
• Your annual installment amount, any credit carryforward from previous years, and your current-year tax liability.
• If the credit comes from a pass-through entity, its name and FEIN and your SC K-1 showing the credit amount.

How to file

1. Apply for the credit with SCDOR using SC SCH TC-58A. After the application process is complete, SCDOR sends a letter approving your eligibility.
2. On SC SCH TC-58, enter which year of the five-year credit calculation you are claiming.
3. For the initial calculation, enter the total property cost on line 1 and multiply it by 25% on line 2. On line 3, enter $2,500,000 for installations placed in service before December 31, 2021, or $5,000,000 for installations placed in service after December 31, 2021. Enter the smaller of lines 2 and 3 on line 4.
4. Enter 20% of line 4 on line 5 as the annual installment. For an installment after the first year, skip lines 1 through 4 and enter the installment amount from the prior year on line 5.
5. Add any prior-year carryforward to the installment. The allowable credit is the smaller of the current-year credit available and your current-year tax liability. Subtract the allowable credit from the available credit to calculate the carryforward.

If you receive the credit from a pass-through entity, skip lines 1 through 4. Enter the entity’s name and FEIN, and enter the credit amount shown on your SC K-1 on line 5.

Paper filing: Attach the schedule to your Income Tax return.

Electronic filing: Keep a copy of the schedule with your tax records.

Include the SCDOR approval letter with the return claiming the credit. Pass-through recipients do not need to provide the letter; it belongs with the entity’s return claiming the original credit.

Common mistakes

• Completing lines 1 through 4 for an installment after the first year. The form says to begin with line 5 instead.
• Completing lines 1 through 4 when receiving a pass-through credit. Use the amount on your SC K-1 for line 5 and provide the entity’s name and FEIN.
• Forgetting the approval letter with the return claiming the original credit. A pass-through recipient does not need to attach it, but the entity must include it with its return claiming the original credit.
• Forgetting to attach the schedule to a paper return or keep a copy with your records when filing electronically.
• Omitting your Social Security Number if you are an individual taxpayer. The form states that it is mandatory.

Questions people ask

When is the credit earned and taken?

The credit is earned in the year the property is placed in service. It is taken in five equal annual installments beginning that year.

Can I carry forward unused credit?

Yes. Unused credit may be carried forward for five additional tax years.

Is there a statewide limit on the credit?

Yes. Credits are allowed on a first-come, first-served basis. The total available to be taken by all taxpayers, based on their five equal annual installments, may not exceed $2.5 million in a tax year.

What if my installation is not at a qualifying location?

You may qualify for the Solar Energy Credit on SC SCH TC-38 instead.

Official sources

• https://dor.sc.gov/sites/dor/files/forms/TC58.pdf