South Carolina tax- observation

On January 30,2026 the SC DOR issued SC Information Letter #26-4 (Revised), which stated that SC has conformed with the Internal Revenue code as amended through December 31,2024.  Therefore, until the SC Legislature addresses conformity (with 2025 and OBBB), SC taxpayers will need to adjust their return if the following 2025 federal provisions are claimed on their federal return.....

So, consider the SALT limit being raised from $10,000 to $40,000.  SC will not allow the increase and the only way for ProSeries to handle it was to add $30,000 of income to SC income.  This, of course, only happens when itemized state and local taxes get up to $40,000.

Now, consider a MFJ taxpayer over 65.  Their standard deduction (if we force the program to take the standard deduction) would be $34,700 and they therefore have an additional federal taxable income of $5,300.  At the same time their SC income now goes down by $30,000.

In my case the net tax result was pretty much a break even.  But I'm thinking if their SALT was $34,700, there would be no impact on the federal return, yet SC income would go down by $34,700.  Just a thought.