SC Taxes and the "One Big Beautiful Bill"
So, I filed my 2025 SC tax return and get an immediate Dept of Revenue adjustment for more SC taxable income of $1500 due to SC not conforming its tax laws to agree with Trump's OBBB and the federal standard deduction being reduced from $31,500 to $30,000.
Now in July, 5 months later, I get another audit adjustment for the State not allowing the Fed's OBBB "Enhanced Deduction for Seniors", for another $6000 of SC taxable income.
In looking into this, I tried to recalculate my SC return on Freetax, but can't without paying $15.99 for an amended SC return.
I'm certainly not appreciating that Freetax didn't calculate my taxes correctly according to SC laws. Do better, Freetax! I'm also not appreciating being charged for another SC return to see if it can calculate my taxes right this time. Really? I have to do it manually? Do better, Freetax!!
Comments
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Hi Mack29036, I understand your frustration, and I'd like to explain what happened.
South Carolina's position on conforming to the OBBBA provisions changed several times. Early on, it appeared the state would likely conform, which is why our software initially reflected that position. But as the legislature continued to debate the issue after filing season for 2025 returns had already begun, we updated our software to reflect nonconformity and added an alert to let customers know about the possible impact if the state later decided to conform.
South Carolina didn't vote not to conform until March 31, 2026. Because of that timing, no tax software could have known at the start of filing season how the state would decide. Once the decision was final, our software was updated as quickly as possible.
Some taxpayers filed before South Carolina reached its final decision, while others waited. If you filed early in 2026, your return may have been based on the information available at that time.
At this point, the SC Department of Revenue has confirmed that the state does not conform to several OBBBA provisions for tax year 2025. According to the SC DOR conformity update, taxpayers who claimed certain federal deductions must add them back on their South Carolina return. The adjustments you received from the SC DOR are therefore likely correct under current South Carolina law, and an amended return may be needed to report those addbacks.
We're sorry for the inconvenience this has caused. This was a difficult situation for South Carolina filers, and we want to help. Our customer support team would be happy to address your concerns and walk you through the next steps. Please sign in to your account and contact us from there so they can assist you directly.
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