SC SCH TD-1: Deferred Income Taxes for South Carolina (Revision 2019-06)
South Carolina · South Carolina DOR · Used for tax years 2024, 2025, 2026
South Carolina Schedule TD-1 calculates deferred income or deferred South Carolina income tax attributable to increased foreign trading receipts. It reports prior-year and current-year receipts and the income attributable to the increase, and is filed with your tax return.
Who files this form
File SC SCH TD-1 with your tax return if you elect to defer South Carolina income tax attributable to an increase in gross income from foreign trading receipts.
Domestic International Sales Corporations (DISCs) and Foreign Sales Corporations cannot make this election. The three-year average of foreign trading receipts must not exceed $5 million.
Tax cannot be deferred if you intentionally stop exporting property or do not have gross income from foreign trading receipts for three tax years.
When it's due
- Deferred tax is due no later than the tax return filing date of the fifth tax year following the year the tax was first deferred. The printed example says tax deferred in 2011 is due with the 2016 tax return.
- Annual interest is due on the required annual return filing date, without regard to any extension.
- Deferred taxes may be paid early.
The form does not print specific calendar filing dates for this edition.
What you'll need
Have the following information available to complete the schedule:
- Your name and SSN or FEIN.
- Gross foreign trading receipts for each of the three prior tax years and for the current tax year.
- Total gross receipts for the line 7 calculation.
- Net income subject to South Carolina tax from the applicable SC1120, SC1040, SC1041, or SC1065.
- The applicable tax rate from SC1120 or the tax rate schedule for SC1040 or SC1041, if you must complete the tax calculation.
When paying deferred tax on SC1120, attach a statement.
How to file
File the completed SC SCH TD-1 with your tax return. The text does not give a mailing address or e-filing instructions.
Enter foreign trading receipts for the three prior years, total them, and divide by three. Compare that average with current-year receipts to calculate the increase. Use the line 7 calculation to determine income attributable to the increase in foreign sales.
Partnerships, S Corporations, and LLCs taxed as partnerships stop after line 7. They must provide each partner, shareholder, or member with their proportional share of deferred foreign trading receipts. Other filers complete the remaining tax calculations as directed.
When paying deferred tax:
- On SC1120, enter it on line 8 or its equivalent and attach a statement.
- On other returns, enter it on one of the other tax lines and write in “Deferred Income Taxes.”
Common mistakes
- Continuing when the three-year average is too high. If line 3 exceeds $5 million, do not complete the rest of the form.
- Completing lines 8–11 for a pass-through entity. Partnerships, S Corporations, and LLCs taxed as partnerships must not complete these lines.
- Entering a negative amount on line 8. If the result is zero or less, enter zero.
- Missing required interest payments. If interest is not paid as required, all deferred taxes become due on the annual return filing date.
- Missing the deferred tax payment deadline. Failure to pay deferred taxes when due makes the taxpayer ineligible to defer taxes for a subsequent tax year.
Questions people ask
What counts as foreign trading receipts?
These are receipts from invoices a seller issues directly to an unrelated purchaser outside the United States. Qualifying activities include sales or other dispositions of export property outside the United States, rentals of export property used outside the United States, related supporting services, and engineering, architectural, or consulting services for projects outside the United States.
How is the deferred income calculated?
Line 7 multiplies net income subject to tax by the increase in foreign trading receipts divided by total gross receipts. For partnerships, S Corporations, and LLCs taxed as partnerships, line 7 is the deferred income amount.
Do I have to pay interest on deferred tax?
Yes. The taxpayer must pay interest annually on aggregate deferred tax at the base period Treasury Bill rate, which the IRS establishes annually. No interest is due on amounts deferred for less than an entire taxable year.
Which tax rate should I use?
Corporations use the tax rate on SC1120. Individuals and fiduciaries use the tax rate schedule provided for SC1040 or SC1041.