Why is a declaration penalty applied? How is the penalty computed?
South Carolina individual income tax is a “pay as you go” tax. If you have income that is not subject to withholding, you arerequired to pay in quarterly estimated declaration tax payments. These estimated payments must equal at least 90% of your total tax due for the year. If you do not pay in enough estimated tax or if the payments are not paid on time in the required amount a declaration penalty may be charged. The penalty is computed on SC2210 for South Carolina returns. The penalty is figured separately for each payment period (quarter). The interest rates vary from quarter to quarter. It is possible to owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. If you owe this penalty and do not want to calculate it yourself, the SC Department of Revenue will automatically figure it for you when your return is processed.
