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November 12, 2020
2020-2679

South Carolina issues 2021 withholding tables and Form SC W-4 changes, as well as 2020 Form W-2 filing reminders

The South Carolina Department of Revenue released the 2021 income tax withholding computer formula and wage-bracket tables to its website. Form SC W-4, South Carolina Employee's Withholding Allowance Certificate, has also been updated for 2021. Beginning for calendar year 2021, employees are required to submit, at the time of hire, both the state Form SC W-4 and the federal Form W-4. (Email notice, 10-23-2020.)

Supplemental withholding rate

The supplemental withholding rate will remain at 7.0% for 2021, the highest rate on the computer formula tables.

State Form SC W-4 requirements

The Department revised Form SC W-4 to include an added area for claiming personal allowances, which were removed from the federal 2020 Form W-4, and to bring consistency between the state's withholding allowance certificate and South Carolina's income tax withholding tables.

Before 2020, Form SC W-4 was a specialized form for nonresident military spouses claiming a South Carolina withholding exemption. This exemption is now included as a checkbox on the revised Form SC W-4.

South Carolina employees who are hired on or after January 1, 2021 must complete both the 2021 Form SC W-4 and the federal 2021 Form W-4. If employees hired in 2021 do not provide their employer with a 2021 Form SC W-4, the employer must withhold state income tax as if the number of allowances claimed for South Carolina withholding purposes is zero.(Form-105, South Carolina Withholding Tax Information Guide.)

Employees hired before 2020 need only submit the Form SC W-4 if they want to make state changes to their previously submitted federal Form W-4 or they claimed exemption fromSouth Carolina withholding in 2020.

Employers should submit a copy of the Form SC W-4 to the Department if the employee has claimed 10 or more allowances or the employer believes that any part of the employee's SC W-4 is fraudulent. (Frequently asked questions, Department website.)

2020 Forms W-2 filing reminder

Form WH-1606, South Carolina Withholding Fourth Quarter and Annual Reconciliation Return, and calendar year 2020 Forms W-2 are due by February 1, 2021 (because January 31, 2021 falls on a Sunday).

Employers submitting 250 or more Forms W-2 must file electronically over the Department's MyDORWAY system. Employers filing fewer than 250 Forms W-2 may file on CD-ROM or paper with Form WH-1612, Transmittal Form for W-2s (do not file this form if filing electronically over MyDORWAY). Electronic filing specifications can be found here and FAQs can be found here.

Forms 1099 showing South Carolina income tax withholding must also be filed on CD-ROM or paper with the Department by February 1, 2021. If the IRS or Social Security Administration requires electronic filing of Forms W-2C, W-2G or 1099, the employer must file these forms by CD-ROM to the South Carolina Department of Revenue. Only Forms W-2 can be filed electronically on MyDORWAY.

For more information about South Carolina withholding tax, see the Department's website, call +1 844 898 8542 or send an email to withholdtax@dor.sc.gov.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)

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