Gather your receipts for the South Carolina Motor Fuel Income Tax Credit in 2020

The South Carolina Department of Revenue (SCDOR) wants to remind you to collect your 2019 gas and vehicle maintenance receipts before filing your taxes next year.

The 2020 tax season is the second year South Carolinians can claim the Motor Fuel Income Tax Credit on their tax returns. The credit offsets the Motor Fuel User Fee (commonly known as the gas tax), which increases by $0.02 on July 1 every year, in accordance with the South Carolina Infrastructure and Economic Development Reform Act.

According to the South Carolina Department of Transportation, as of Oct. 31, 2019, $275.4 million from increased Motor Fuel User Fee revenues have been deposited in the Infrastructure Maintenance Trust Fund to support road and bridge work across the state.

What is the Motor Fuel Income Tax Credit?

South Carolina taxpayers can claim this income tax credit on the lesser of the increase in the Motor Fuel User Fee, which is paid when you purchase gas, or preventative maintenance costs performed during the year. The credit is available for expenses on vehicles registered in South Carolina, in the name of a resident taxpayer, for gas or maintenance work purchased in South Carolina.

As of November, more than 134,000 South Carolina taxpayers claimed this credit for the 2019 tax season, with an average credit of $24.37 per return. The available credit cap increases to $65 million in the 2020 tax season.

Drivers currently pay $0.22 per gallon in Motor Fuel User Fees. Learn more about Motor Fuel User Fee rate and annual increases at dor.sc.gov/tax/motor-fuel.

How do taxpayers claim the credit?

When taxpayers file South Carolina income taxes in the 2020 filing season, they should use their receipts saved throughout 2019 to calculate their Motor Fuel User Fee Credit. Continue saving receipts from gas purchases and preventative maintenance costs beginning January 1, 2020 to claim the credit in 2021.

  • Taxpayers should save all South Carolina receipts of gas purchases and vehicle maintenance expenses, including receipts from the gas pump, credit card statements, or invoices. Since gas pump receipts can become illegible over time, taxpayers may want to photocopy their receipts. The receipts should not be sent to the SCDOR, but taxpayers should save them for their records.
  • The gas receipts should show the number of gallons purchased in South Carolina. The maintenance receipts should show the car model, amount, and type of work performed in South Carolina.
  • The credit is claimed on the I-385, available at dor.sc.gov/forms and included in many online filing products.

For more information about the Motor Fuel Income Tax Credit including Q&As, guidance, and examples regarding the provisions of the tax credit, check out SC Revenue Ruling #17-6.

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