SC CDCC: decide whether to honor the § 21(e)(4) separated-taxpayer exception (currently blanket MFS exclusion)

[hua7450]

Summary

Decision item from the #8826 verification. S.C. Code § 12-6-3380(A) computes the state credit "as provided in Internal Revenue Code Section 21, except that the term 'applicable percentage' means seven percent" — importing § 21 wholesale, including the § 21(e)(2) joint-return requirement and the § 21(e)(4) separated-taxpayer exception. The model (sc_cdcc_potential.py) applies a blanket filing_status != SEPARATE exclusion, so a separated MFS filer who maintains a home for a qualifying individual gets the federal credit (and the RI/WV pass-throughs) but $0 from SC.

The SC1040 instructions state a blunt "cannot claim this credit if your federal filing status is Married Filing Separate," so the current model is form-faithful; switching to the statute reading is a one-line fidelity fix.

Sources (statute text blocked to automated fetch; verified via secondary corroboration — pull manually for verbatim quotes)

• S.C. Code § 12-6-3380: https://law.justia.com/codes/south-carolina/title-12/chapter-6/section-12-6-3380/
• SC1040 instructions: https://dor.sc.gov/sites/dor/files/forms/SC1040Instr_2024.pdf

Proposed fix (if statute reading is chosen)

Replace the blanket exclusion in sc_cdcc_potential.py with tax_unit("cdcc_filing_status_eligible", period), plus a separated-filer test.

Not blocked by #8855/#8878 — no shared files (cdcc_filing_status_eligible is already on main via #8704).

🤖 Generated with Claude Code