|Posted by Greg Bennett on August 28, 2014 at 12:45 AM|
The number of Beaufort County South Carolina homeowners with high insurance costs who have taken advantage of a state tax credit worth up to $1,250 has more than quadrupled.
Still, too few seem aware of it.
With hurricane and flood insurance on everyone's mind here in the Lowcountry, it's a tax credit every homeowner should know exists.
Soaring flood insurance rates - the federal solution to a $24 billion shortfall in the National Flood Insurance program - may be postponed by Congress, or maybe not. But the sharply higher rates some property owners already have seen near the coast will make even more people eligible for this tax credit.
The "excess insurance premium tax credit" has been available since 2007, but word seems to have been getting out slowly. Some accountants were unaware of it.
In 2008, just 511 South Carolina taxpayers claimed the credit, but by 2012 more than 2,400 benefited, according to state Department of Revenue reports.
With Beaufort County homeowner's insurance costs soaring in coastal areas, the number of people who should qualify for the credit is certainly rising. Safe to say, the roughly 2,400 taxpayers who claimed the credit in 2012 are a fraction of those who could have.
It's not a "refundable" tax credit, so if you don't owe state income tax you won't get a check, but it is a dollar-for-dollar reduction in your state tax bill. The credit is claimed on South Carolina returns by filing Form TC44.
If the credit is greater than the amount of tax owed, then it will bring your tax bill down to zero and the difference can be carried forward for up to five years.
And if you didn't know about the tax credit, but would have qualified, you could file amended returns to claim the credit for up to three years.
The insurance costs that count toward the credit include homeowners insurance, any additional "wind and hail" insurance, and any flood insurance. Some homeowners might have three different policies, or maybe more.
The income used in the calculation is your federal adjusted gross income, or AGI. That's important, because for most people "adjusted gross income" is less than their salary.
So if you own a home and pay big insurance bills, make sure to check if you qualify for South Carolina's excess insurance premium credit before filing your state tax return.
This article is an excerpt from David Slade of the The Post and Courier
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