SC4972: Tax on Lump Sum Distributions (2024)
South Carolina · South Carolina DOR · Used for tax years 2024
South Carolina Form SC4972 calculates the tax on lump-sum distributions from qualified retirement plans. It includes a capital gain election and a 10-year tax option and is attached to Form SC1040 or SC1041.
Who files this form
If you used federal Form 4972 for a lump-sum distribution, you must use South Carolina Form SC4972 to calculate the South Carolina tax. The form covers lump-sum distributions from qualified retirement plans.
South Carolina's provisions for these distributions are the same as the federal provisions.
What you'll need
Have these forms and details available:
- Federal Form 4972: SC4972 line 3 uses the amount from federal line 10.
- Form 1099-R: SC4972 uses the capital gain in Box 3 and, if applicable, the current actuarial value of an annuity in Box 8.
- SC1040 or SC1041: Attach SC4972 to the applicable return.
- Deduction information from SC1040 or Schedule NR: Check any retirement or age 65 and older deductions already claimed there.
- Identifying information: Your name and SSN or FEIN. Individual taxpayers must provide their Social Security Number.
- Dates of birth for applicable deductions: The form requests dates of birth for the taxpayer, spouse, and deceased spouse, as applicable.
The form directs you to the federal instructions for the capital gain election and the 10-year tax option.
How to file
- Complete Part I to choose the capital gain election, following the federal instructions. Multiply line 1 by 3.92%.
- Complete Part II to choose the 10-year tax option, following the federal instructions. Use the form's 2024 Tax Computation Schedule for lines 19 and 22.
- If you use only Part I, enter the line 2 amount on SC1040, line 7, or SC1041, line 9. If you complete Part II, enter the line 25 tax on that same return line.
- Attach SC4972 to your SC1040 or SC1041.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Claiming the same deduction twice: Claim retirement and age 65 and older deductions on SC4972 only to the extent they were not claimed on SC1040 or Schedule NR.
- Overlooking the line 4 restriction: If you claimed an age 65 and older deduction on SC1040 or Schedule NR, do not include any individual retirement deduction on line 4.
- Missing the line 9 skip rule: If line 9 is $70,000 or more, skip lines 10 through 13, enter the line 9 amount on line 14, and go to line 15.
- Ignoring blank-line instructions: If line 8 is blank, skip lines 15 through 17. After completing line 20, also skip lines 21 through 23, enter the line 20 amount on line 24, and go to line 25.
- Rounding line 15 too much: Round its decimal result to at least four places.
Questions people ask
How much qualified retirement income can I deduct?
An individual under age 65 may deduct up to $3,000. An individual age 65 or older may deduct up to $10,000. The instructions limit claiming deductions already used on SC1040 or Schedule NR.
Can a surviving spouse claim a retirement deduction for income from a deceased spouse's plan?
Yes. A surviving spouse receiving qualified retirement income from a deceased spouse may deduct up to $3,000 or $10,000, whichever would apply if the deceased spouse were alive. This is in addition to the deduction for retirement income from the surviving spouse's own plan.
What is the age 65 and older deduction?
Beginning in the tax year a resident individual reaches age 65, a $15,000 deduction can be claimed against any South Carolina income. It is reduced by any individual retirement deduction, but not by a surviving spouse retirement deduction. Claim it on line 5 only to the extent it was not claimed on SC1040 or Schedule NR.
Where can I find more information about these deductions?
The form points to the SC1040 instructions, available at dor.sc.gov/forms.