The additional $2800 is a mandatory add-back stemming from 2019 state legislation enacted following the federal Tax Cuts and Jobs Act (TCJA). As this law has not been repealed or replaced, it remains a requirement in addition to other new statutory add-backs related to OBBBA.
Specifically, this is pursuant to SC Code Section 12-6-1130(2).
This statute requires taxpayers to add back state and local taxes deducted, but is limited to the difference between the itemized and standard deduction. (See SC Revenue Ruling #19-1.) If you itemized in 2024, you likely saw a similar calculation on that return.
South Carolina historically conforms to the federal tax laws with only minor deviations, but it does require the Legislature to act first.
While there is anticipation that they will pass conformity legislation retroactive to 2025, currently, the return must be calculated under existing law.
Logically, I agree with you that it should be either or - but unfortunately the law and the guidance from the SC DOR require that it be both at this time.
I suggest filing your federal return now but holding your South Carolina return to see if favorable legislation is enacted soon. As more taxpayers identify these add-backs, there is increased attention on the issue.
Thank you for providing the diagnostic token. It was very helpful in confirming the calculations and ensuring the program is operating exactly as intended.
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