SC Tuition Tax Credit

[shayjete]

For the 2021 tax year, I have realized that some of the boxes that autopopulated for the I-319 SC Tuition Tax credit form are incorrect. The dates of  being enrolled at the institution only cover part of the year, when in fact I attended the entire year. And the tuition amount includes a summer course that I took at a non-qualifying institution. Despite these errors, I still qualify for the credit no matter what.  But I should have checked it more carefully. 

I realized these errors after being audited and I was trying to find out why. I have provided their requested documentation. Just concerned 

[DawnC]

Audits are random.   Did you have a question for the TurboTax Community?  

[shayjete]

Yes several things actually:

Did I not qualify for the tax credit because I was a graduate student in 2021 (despite it being a qualifying institution)?

Did I not qualify for the tax credit because it was four years after high school? Did I not qualify in 2022 as well?

Do I need to file an amended tax return?

[SusanY1]

The SC tuition credit is only allowed for the first four consecutive years after enrollment and that enrollment must begin within 12 months of graduation from a South Carolina high school. 

The credit is also only good for undergraduates, and the student must complete 15 credit hours in each semester for which the credit is claimed (12 hours for students at Converse and Wofford). 

Also, the student can't have received any LIFE or Palmetto Fellows scholarship funds.  


It sounds like you may not have qualified for the credit.  The South Carolina Department of Revenue tends to reply rather quickly if you use their portal to upload the documents, so you will likely have a response from them about the documents you've submitted soon.

If you also claimed the credit in 2022 and believe you weren't eligible based on this criteria, it's best to amend that return now and work with the state to repay the credit before an audit.  This will minimize the penalties and interest due on the repayment.  

  

 

[shayjete]

Gotcha. Well let me ask this. If I do qualify for the Lifetime Learning Credit this year, can that be used to pay back the money I owe for 2021 and 2022? Or no?

[DawnC]

You can claim the Lifetime Learning credit on your federal tax return if you had education expenses in 2023.   Did you take the AOTC on your federal return during those years?  It is the first 4 years, before grad school, also.    

[shayjete]

I know I am eligible for the LLC. 

As far as the AOTC, I went to college for free. 

For the LLC, I am wondering if I can use the tax credit from it to pay off the state back taxes that I am going to owe.

[AmyC]

The LLC is  a credit that reduces your tax liability. This means you will owe less money or have a bigger refund on your federal. It can't be applied to anything other than your federal tax liability. However, with the increased refund, you can put that money towards anything you want.

See What education tax credits are available?