SC sending out tax rebates this year. How much money will you get? How will it show up?
Thousands of South Carolinians will get one-time cash bump this year after lawmakers agreed to send $1 billion back to taxpayers.
How will the money get to each taxpayer?
The South Carolina Department of Revenue says it’s still finalizing how much money it will send to each individual taxpayer out of the $1 billion pool approved by lawmakers earlier this year.
Most of that information won’t be known until after the agency receives and verifies returns filed by the Oct. 17 deadline for income tax filers who asked for extensions this year.
But the state agency told The State this week the process will be much simpler and more direct than 2019 when the state Department of Revenue distributes the rebates in November or December.
In order to be more efficient, the state will directly deposit rebates into people’s bank accounts if the agency has that information. About eight in 10 filers choose direct deposit for their refunds, the state has said.
“The exciting part about this is I hope it will help encourage people who aren’t currently choosing direct deposit to do so in the future because it’s a safer and faster way to receive your refund,” said Ashley Thomas, a spokeswoman for the Department of Revenue.
In 2019, the state sent out $50 checks to taxpayers using $61 million in tax dollars generated from a Mega Millions winner to send out rebates.
To carry out that program, the state spent $700,000 on postage alone.
The revenue department said nearly 68,000 $50 rebate checks went uncashed in 2019. More than 28,000 checks that were returned because they were undeliverable, according to the Department of Revenue.
The undeliverable checks went into the state’s unclaimed property program ran by the treasurer’s office.
How much this year’s rebate distribution will cost also remains to be seen.
It will depend on how many people choose direct deposit over paper checks for refunds during tax season, and how much staff time will be needed to distribute the rebates, Thomas said.
How much will taxpayers get?
Ultimately, the size of each individual rebate will be equal to a filer’s 2021 income tax liability up to $700 under the tax cut legislation adopted by lawmakers.
That maximum amount could increase to as much as $800 if enough money is available after final tax returns come in by Oct. 17.
“It’s a dynamic number; it’s not a simple $50 rebate,” Thomas said. “The rebate amount and cap per rebate is determined based on the returns filed. Not only the number of returns filed, but the amount owed.”
About 1.5 million tax filers could receive rebates.
In the 2019 tax year, the state had nearly 2.5 million returns but about 1 million filers didn’t have any tax liability because they had enough deductions and exemptions or didn’t earn enough money to pay income taxes.
One of the issues the revenue department will have to work through is how many disbursements it will release every day when it eventually distributes the rebates.
“It’s not just like pressing a button and here you go,” Thomas said.
