With the available cap for South Carolina’s Motor Fuel Income Tax Credit increasing to $85 million for tax year 2020, the S.C. Department of Revenue reminds residents to compile gas and vehicle maintenance receipts to include in tax filings next year.
The upcoming tax season is the third year S.C. residents can claim the tax credit, which offsets the Motor Fuel User Fee. The fee, commonly known as the gas tax, went into effect in 2017 and increases by $0.02 on July 1 every year in accordance with the South Carolina Infrastructure and Economic Development Reform Act.
Drivers currently pay 24 cents per gallon in Motor Fuel User Fees.
Residents can claim the credit for vehicles registered in South Carolina, in the name of a resident taxpayer, or for gas or maintenance work purchased in South Carolina.
More than 79,000 South Carolina tax returns claimed the credit for the 2020 filing year as of Nov. 30, according to the state revenue department, with an average credit of $43.05 per return for a total of $3.4 million.
As of Nov. 30, $502.6 million from Motor Fuel User Fee revenues have been deposited in the state Infrastructure Maintenance Trust Fund to support road and bridge improvements, according to the S.C. Department of Transportation.