Section 12-6-50

• Section 12-6-50 of the South Carolina Income Tax Act says that South Carolina does not adopt the Internal Revenue Service code allowing business people to carry back their net operating losses on their business. Thus, if you have a net operating loss, you must declare that loss all at once on your South Carolina income taxes rather than carrying back a portion of the loss.
  
  

Carry Forwards

• Although South Carolina does not allow business people to carry back their net operating losses, it does allow them to carry losses forward. If your net operating losses exceed the maximum you are allowed to claim in a particular year, you can carry your loss forward to the next year until you have claimed all of your net operating losses.
  
  

Amended Returns

• South Carolina allows you to amend your tax returns if you discover an error after filing your original return. If you are claiming a refund, you have three years from the date you filed your return to file an amended return. However, because South Carolina does not allow carry backs for net operating loss, you cannot amend your previous tax returns to reflect a net operating loss from the current year.
  
  

Safe Harbor

• In 2007, South Carolina allowed victims of a ponzi scheme to use IRS safe harbor rules to file a claim for theft loss. These victims could claim 95 percent of income from this scheme as a theft loss if they wished. However, regardless of whether victims used safe harbor rules or claimed a straight theft loss, they could not carry the loss back under South Carolina tax laws.