It isn’t often that state tax boards offer a helping hand, but South Carolina homeowners got that in the form of an insurance tax credit. The credit is specifically for residents who purchased homeowners insurance for the main purpose of hurricane and flood coverage. Ironically, while the law, known as the “excess insurance premium tax credit”, has been on the books and available in the state since 2007, awareness of its existence has only recently begun to pick up steam. It was, apparently, one of South Carolina’s best kept secrets.
Finally, homeowners have started to take notice and the numbers are growing. As a matter of fact, even among accountants, the credit was so obscure, it wasn’t always declared on state tax returns. That, too, is changing as word of the “excess insurance premium tax credit” is getting out. Consequently, the latest recorded statistics show that the amount of homeowners who have taken advantage of the tax credit has more than quadrupled in four years. Unfortunately, that isn’t saying much, given how slow the process of popularizing the credit has been.
According to data taken in 2008, only 511 homeowners in the state had claimed the little-known credit. However, per more recent statistics gathered in 2012, the most recent complete year of information from the South Carolina Department of Revenue, more than 2,400 homeowners were benefiting from the credit. Still, a far cry from the numbers one would expect, leaving a tremendous pool of residential property owners who continue to be unaware of the opportunity that’s available to them of deducting the cost of their homeowners insurance.
Currently, the state tax credit allows for an amount of up to $1,250 per property owner. And, with the cost of hurricane and flood coverage increasing rather quickly, those are many homeowners who could benefit by just knowing about the tax credit.
Because weather-related damage, occurring particularly in coastal areas as a result of hurricanes and flooding, has been going on semi-regularly over the past few years, insurance premiums continue to be on the rise.
Obviously, any additional assistance policyholders can obtain from the state by means of a tax credit to make their coverage more affordable would be greatly appreciated – if they only knew about it. Yet, another fact most South Carolina homeowners, who are located in flood plains or along the coast may not be aware of is – the National Flood Insurance Program is currently facing a rough road ahead, with a $24 billion shortfall. That usually translates into substantial rate hikes to consumers in an effort to offset the deficit.
When those rate hikes go into effect…just remember this – at tax time – don’t forget to claim the “excess insurance premium tax credit”. Check with your accountant to make sure you’re eligible and go for it. It’s yours to claim – so, why not take advantage of it?
Hopefully, the number of homeowners who become aware of this tax credit will continue to increase over the next several months until all qualifying South Carolina property owners get a tax break to help them with their rising homeowners insurance costs.
If you happen to be one of those homeowners who are taking advantage of the tax break …or you’re just finding out about it…also make sure you’re getting the best rate on your homeowners insurance. Why not get a free homeowners insurance quote today?
Did you know about the state tax credit or is this pleasant news to you? Feel free to share your thoughts in the comments section below.