Add SC H.3492 partially refundable EITC reform

[DTrim99]

Summary

Implements South Carolina Bill H.3492 (126th Session, 2025-2026) which amends SC Code Section 12-6-3632 to make a portion of the state EITC refundable.

Proposed Statutory Language

Section 12-6-3632. There is allowed as a nonrefundable credit against the tax imposed pursuant to Section 12-6-510 on a full-year resident individual taxpayer an amount equal to one hundred twenty-five percent of the federal earned income tax credit (EITC) allowed the taxpayer pursuant to Internal Revenue Code Section 32. If the credit allowed by this section exceeds the taxpayer's state income tax liability, then twenty-five percent of the excess credit must be refunded to the taxpayer.

Implementation

Key formula:

• SC EITC = 125% × Federal EITC (unchanged)
• If SC EITC > tax liability:
  • Non-refundable portion = tax liability
  • Refundable portion = 25% × (SC EITC - tax liability)

Example:

Item	Amount
Federal EITC	$4,000
SC EITC (125%)	$5,000
SC tax liability	$3,000
Non-refundable portion	$3,000
Excess	$2,000
Refundable portion (25%)	$500

Files Added

• parameters/gov/contrib/states/sc/h3492/in_effect.yaml
• parameters/gov/contrib/states/sc/h3492/refundable_excess_rate.yaml
• reforms/states/sc/h3492/__init__.py
• reforms/states/sc/h3492/sc_h3492_eitc_refundable.py
• tests/policy/contrib/states/sc/h3492/sc_h3492_eitc_refundable.yaml

Test plan

• 6 unit tests covering all scenarios (all passing)
• Credit fully absorbed by tax (no refund)
• Credit partially exceeds tax (partial refund)
• Zero tax liability (maximum refund)
• With other non-refundable credits
• No federal EITC
• Small credit absorbed

References

• SC H.3492 Bill Text
• SC Code Section 12-6-3632
• Closes Implement SC H.3492: Partially Refundable EITC #7187

🤖 Generated with Claude Code

[PavelMakarchuk]

LGTM after nits

[DTrim99]

Fixes Applied

Review Comments Addressed

• ✅ Renamed variable: sc_h3492_eitc → sc_h3492_total_eitc for clarity
• ✅ Capped excess at 0: Added max_(0, ...) to the refundable portion formula to ensure excess never goes negative

Verification

• ✅ All 6 tests pass locally
• ✅ Code formatted

Ready for re-review.

🤖 Generated with Claude Code