South Carolina · research and development · SC-RD-001
Research Expenses Credit
Publication revised September 24, 2026. Sourcebook page 245.
Credit amount / calculation
5% of South Carolina qualified research expenses; limited to 50% of remaining tax liability; 10-year carryforward.
Business fit and eligible activity
Businesses claiming the federal research credit can claim a South Carolina production, routine quality control and an equipment purchase alone do not qualify.
Illustrative business benefit
A hardwood mill spends $320,000 on a documented project to improve recovery from low-grade logs using scanner changes, controlled test runs, software adjustments, and revised sawing patterns. Assume $200,000 is ultimately treated as the relevant qualified or excess research base. At 5%, the state credit would be about $10,000 before program caps and tax-liability limits. The company would need records showing the uncertainty, alternatives tested, people involved, and results - not simply a year-end estimate of 'engineering time.'
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit. credit for in-state research. Qualified research activity. Ordinary
Official sources
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