SC1041 K-1: Beneficiary's Share of SC Income, Deductions, Credits, Etc. (Revision 2023-08)

Who files this form

The estate or trust prepares an SC1041 K-1 to report each beneficiary’s share of income, deductions, and South Carolina credits. It must include all SC1041 K-1s with its SC1041 Fiduciary Income Tax Return and provide a copy to each beneficiary.

Beneficiaries attach the SC1041 K-1 to a paper Income Tax Return or keep it with their records if filing electronically.

What you'll need

To complete the SC1041 K-1, have:

• The beneficiary’s federal Schedule K-1 amounts.
• The estate or trust’s FEIN, name, and fiduciary contact information.
• The beneficiary’s name, address, ZIP code, and identifying number. Individual taxpayers must provide their Social Security Number.
• The beneficiary’s share of South Carolina adjustments, income or deductions allocated to South Carolina and other states, and South Carolina credits.

For each nonresident beneficiary with tax withheld, the estate or trust must prepare an SC41, Fiduciary Report of Nonresident Beneficiary Tax Withheld, and provide it along with the SC1041 K-1.

How to file

For the estate or trust: Include all SC1041 K-1s with the SC1041 Fiduciary Income Tax Return. Give each beneficiary their SC1041 K-1.

For the beneficiary: Attach the SC1041 K-1 to your Income Tax Return if filing on paper. If filing electronically, keep it with your records.

For nonresident beneficiaries with tax withheld, the estate or trust must provide copies of both the SC41 and SC1041 K-1 so the beneficiaries may attach them to their South Carolina Income Tax returns.

Common mistakes

• Do not leave out required identifying information. The form specifically requires a Social Security Number for individual taxpayers.
• Do not omit SC1041 K-1s from the estate or trust’s SC1041 return, and remember to provide a copy to each beneficiary.
• If you are a beneficiary filing on paper, remember to attach your SC1041 K-1. If filing electronically, keep it with your records.
• When listing South Carolina credits, attach an additional sheet if needed.

Questions people ask

What do the four columns show?

Column A shows federal Schedule K-1 amounts. Column B shows South Carolina adjustments. Column C shows amounts allocated or apportioned to states other than South Carolina. Column D shows amounts allocated or apportioned to South Carolina.

How should South Carolina adjustments be entered?

Show additions as positive numbers and subtractions in brackets as negative numbers in Column B.

Is withholding required for nonresident beneficiaries?

The instructions require estates or trusts to withhold on nonresident beneficiaries’ South Carolina taxable income at South Carolina’s top marginal Individual Income Tax rate for the tax year. The form also has a checkbox for a beneficiary who is exempt from nonresident withholding because they filed an I-41 affidavit with the trust or estate.

Where can I find more instructions and the SC41?

The SC1041 instructions are available at dor.sc.gov/forms. The SC41 is included in those instructions.

Official sources

• https://dor.sc.gov/sites/dor/files/forms/SC1041K1.pdf