S.C. issues guidance on nonresident shareholder, partner withholding

The South Carolina Department of Revenue has issued a temporary revenue procedure to assist personal and corporate income taxpayers in complying with the relevant code sections concerning withholding on South Carolina income of nonresident shareholders and partners. The concerned code sections require S corporations and partnerships to withhold income tax at the rate of 5% on nonresident S corporation shareholders’ and nonresident partners’ share of South Carolina taxable income, and further provide for the filing of a composite individual income tax return on behalf of certain nonresident shareholders or partners by the S corporation or partnership. The temporary revenue procedure discusses general withholding requirements, procedure, and exceptions; specific questions concerning Form I 309, Nonresident Shareholder or Partner Affidavit and Agreement Income Tax Withholding; and specific questions concerning Form SC I-338, Composite Return Affidavit. (Temporary Revenue Procedure #17-2, South Carolina Department of Revenue, February.)

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