South Carolina amends tax code to exempt minors from income tax filing requirements

A new legislative proposal in South Carolina aims to ease the financial burden on young earners by introducing tax deductions for individuals under the age of eighteen. House Bill 3865, introduced on January 30, 2025, seeks to amend the state’s income tax laws, allowing minors to deduct their earnings and exempting them from filing income tax returns altogether.

The bill proposes two key changes to the South Carolina Code of Laws. First, it amends Section 12-6-1140 to include a provision that permits a deduction for amounts earned by individuals under eighteen as of January 1 of the tax year. Second, it adds Section 12-6-4915, which states that minors are not required to file an income tax return, simplifying the tax process for families with young earners.

Supporters of the bill argue that it recognizes the contributions of young workers, many of whom take on part-time jobs to support their families or save for future education. By allowing these individuals to keep more of their earnings, the bill aims to promote financial literacy and responsibility among youth. Additionally, it could encourage more young people to enter the workforce, potentially benefiting local businesses that rely on part-time help.

However, the bill has sparked debates among lawmakers regarding its potential impact on state revenue. Critics express concerns that exempting minors from filing could lead to a decrease in tax income, which may affect funding for essential public services. Some lawmakers are also questioning whether the bill adequately addresses the complexities of tax compliance for families with multiple earners.

As the bill moves through the legislative process, its implications could resonate beyond just tax policy. If passed, it may set a precedent for how states approach taxation for younger workers, potentially influencing similar legislation in other regions. The bill's supporters are optimistic about its chances, citing a growing recognition of the importance of supporting young workers in today’s economy.

The next steps for House Bill 3865 will involve committee reviews and discussions, where its provisions will be scrutinized further. As the legislative session progresses, the outcome of this bill could significantly impact the financial landscape for young South Carolinians and their families.