Reference is to Printer's Date 5/19/16-H.
Amend the bill, as and if amended, by adding an appropriately numbered SECTION to read:
/ SECTION ___. A. Section 12-6-1170 of the 1976 Code is amended by adding an appropriately lettered subsection at the end to read:
"( )(1)
Notwithstanding any other provision of this section, if a
taxpayer claims a deduction pursuant to Section 12-6-1171, then
the deduction allowed by this section must be reduced by the
amount the taxpayer deducts pursuant to Section 12-6-1171;
however, this subsection does not apply if the deduction claimed
pursuant to Section 12-6-1171 is claimed by a surviving
spouse.
(2)
In the case of married taxpayers who file a joint federal
income tax return, the reduction required by item (1) applies to
each individual separately, so that the reduction only applies
to the amount the individual claiming the deduction pursuant to
Section 12-6-1171 otherwise could have claimed pursuant to this
section if the individual had not filed a joint return."
B. Article 9, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-1171.
(A)(1) An individual taxpayer who has
military retirement income, each year may deduct an amount of
his South Carolina earned income from South Carolina taxable
income equal to the amount of military retirement income that is
included in South Carolina taxable income, not to exceed
seventeen thousand five hundred dollars. In the case of married
taxpayers who file a joint federal income tax return, the
deduction allowed by this section shall be calculated separately
as though they had not filed a joint return, so that each
individual's deduction is based on the same individual's
retirement income and earned income. For purposes of this item,
'South Carolina earned income' has the same meaning as provided
in Section 12-6-3330.
(2)
Notwithstanding item (1), beginning in the year in which
an individual taxpayer reaches age sixty-five, an individual
taxpayer who has military retirement income may deduct up to
thirty thousand dollars of military retirement income that is
included in South Carolina taxable income.
(B) The term
'retirement income', as used in this section, means the total of
all otherwise taxable income not subject to a penalty for
premature distribution received by the taxpayer or the
taxpayer's surviving spouse in a taxable year from a qualified
military retirement plan. For purposes of a surviving spouse,
'retirement income' also includes a retirement benefit plan and
dependent indemnity compensation related to the deceased
spouse's military service.
(C) A surviving spouse
receiving military retirement income that is attributable to the
deceased spouse shall apply this deduction in the same manner
that the deduction applied to the deceased spouse. If the
surviving spouse also has another retirement income, an
additional retirement exclusion is allowed.
(D) The department may
require the taxpayer to provide information necessary for proper
administration of this subsection."
C. This SECTION takes effect upon approval by the Governor and first applies to tax years beginning after 2015. /
Renumber sections to conform.
Amend title to conform.