Bill > H3365

This bill addresses the "marriage tax penalty" in South Carolina by allowing married couples who file a joint federal tax return to calculate their state income tax in a way that minimizes their tax burden. Specifically, the bill enables married taxpayers to calculate their South Carolina state income tax as if they were filing as single individuals if doing so would result in a lower total tax liability. If the combined tax owed as single filers is less than what they would owe filing jointly, the excess amount can be reduced from their joint return. Importantly, the bill does not change the requirement that married couples must still file a joint federal and state return; it simply provides a mechanism to potentially lower their state tax burden. The bill will take effect upon the Governor's approval and will first apply to tax years beginning after 2024. The South Carolina Department of Revenue is authorized to create rules and regulations to implement this new tax calculation method, which aims to provide tax relief for married couples who may be financially disadvantaged by current joint filing requirements.