SC4972: Tax on Lump Sum Distributions (2025)
South Carolina · South Carolina DOR · Used for tax years 2025
Form SC4972 calculates South Carolina tax on lump-sum distributions from qualified retirement plans. It includes sections for the capital gain election and the 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.
What you'll need
Have these forms and details ready:
- Federal Form 4972: SC4972 line 3 uses the amount from federal Form 4972, line 10.
- Form 1099-R: SC4972 uses capital gain from Box 3 and the current actuarial value of an annuity from Box 8, as applicable.
- SC1040 or SC1041: Attach SC4972 to your return and report the calculated tax there.
- Deduction information from your SC1040 or Schedule NR: Check any retirement or age 65 and older deductions already claimed.
- Identifying information: Your name and SSN or FEIN. Individual taxpayers must provide their Social Security Number.
- Dates of birth for applicable deductions: The form asks for the taxpayer's, spouse's, or deceased spouse's date of birth.
How to file
- Complete Part I to choose the capital gain election and Part II to choose the 10-year tax option. The form directs you to the federal instructions for these choices.
- Use the 2025 Tax Computation Schedule on page 2 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 total tax from line 25 on the same return line.
- Attach SC4972 to your SC1040 or SC1041.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Do not claim the same deduction twice. Retirement and age 65 and older deductions may be claimed on SC4972 only to the extent they have not been claimed on SC1040 or Schedule NR.
- Do not include an individual retirement deduction on line 4 if you claimed an age 65 and older deduction on SC1040 or Schedule NR.
- Follow the line-skipping directions. If line 9 is $70,000 or more, skip lines 10 through 13 and carry line 9 to line 14. If line 8 is blank, follow the skip directions on lines 14 and 20.
- Round the decimal on line 15 to at least four places.
- Use the federal instructions for multiple recipients when completing line 24.
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 deduction is subject to the form's limits on amounts already claimed 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 surviving spouse's retirement deduction from their own plan.
How does the age 65 and older deduction work?
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 SC4972 only to the extent it was not claimed on SC1040 or Schedule NR.
How is the capital gain election amount calculated?
Enter the capital gain reported in Box 3 of Form 1099-R on line 1, then multiply it by 3.92% on line 2. If you also choose Part II, continue to line 3. Otherwise, report line 2 on SC1040, line 7, or SC1041, line 9.