Tax Return In The State?

Q: I'm a resident of California that is going to be in South Carolina working on a project for my company for 10 days. I'm assuming the my company will have to then pay taxes in South Carolina, but will I have to file a personal income tax return in the state?

A: -No -Why not? I'm not aware of any South Carolina de minimus for nonresident activity -You will have South Carolina source income from performing services in the state, and as a result you will be required to file a SC nonresident individual income tax return. Some states have a "de minimis" rule for individuals who work in the state for only a short time, but SC is not one of them. Basically, if you earn enough income there to generate a SC tax liaiblity, you will be required to file. Your employer should withhold SC individual income tax from your wages earned while you are working there. Even if there is no withholding, you are still required to file if you earn enough to generate a tax liability. California will give you credit for the tax you pay to SC, limited to the California tax that relates to that income. As a practical matter, working in the state for only two weeks may result in no tax liability, or not enough tax liability

to make it worth your while to file the return, or the state's while to pursue you even if it ever finds out you were there. So a certain amount of judgment may be exercised with minimal risk. Legally, however, you are required to file and subject to penalties for failure to do so if you have any tax liability arising from your employment in the state. -The Carolinas are bitchy people. One of my clients had to withhold on two days of their employees wages while they were in the state installing a piece of equipment. It was less than $6 of withholding. Not hardly worth lunch. But they enforced the withholding (because they can do that on a government job).