How does a nonresident shareholder or partner who had amounts withheld by the S-corporation or partnership claim a credit for the amount withheld?
A. The S-corporation or partnership must provide each nonresident shareholder or partner for whom tax was withheld a federal form 1099-MISC marked “SC ONLY”on the top of the form. The information on the form should include the shareholder’s or partner’s name, address, social security number, and amount of tax withheld. A copy of form 1099-MISC must be attached to the nonresident shareholder’s or partner’s South Carolina income tax return as verification for claiming the credit for the withholding taxes paid. A Schedule K-1 is not acceptable in lieu of the form 1099-MISC. See Code Section 12-8-590, SC Revenue Procedure 92-5.
