Does FreeTaxUSA automatically assume non-conformity for South Carolina residents?

ThatGuyOnABike
ThatGuyOnABike Member Posts: 1 Newcomer
in State Filing

I was just about to file my taxes the other day when I got hit with a message about how South Carolina hadn't adopted the OBBB, and it affected me as someone who is a tipped employee. It said that I can file now assuming non-conformity.

What I want to know before I proceed is whether or not FreeTaxUSA automatically assumes non-conformity with the OBBB for SC residents when they're filing their state taxes. Do I need to do anything special to make sure it's in "assuming non-conformity" mode, or is it already doing that?

It's my understanding that if I file assuming non-conformity, and I'm wrong, I can always amend my taxes later this year to receive the rest of my return [if I want to open up that can of worms], but if I file assuming conformity, and I'm wrong, I would HAVE to amend my taxes and I would probably have to pay some money back. I'd rather the first scenario than the second.

Also, while I have your attention, does the OBBB apply to all federal tax returns, regardless of their state's situation?

I appreciate any insight into this situation.

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Best Answer

  • Taylor
    Taylor FreeTaxUSA Agent Posts: 71 image
    Answer ✓
    Hello ThatGuyOnABike,

    You don't need to do anything special or toggle any settings. The software is already calculating your South Carolina return as if the state has not adopted the OBBB additional deductions.

    You can view this on the South Carolina State Summary screen. Where it lists "Other Additions to Income," the OBBB deductions are being added back in as taxable SC income.

    Regarding the OBBB and federal returns, yes, the OBBB deductions apply to all federal tax returns for the 2025 tax year, regardless of what state you live in.

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