South Carolina Composite Return Affidavit

Composite Return Affidavit
W:\FORMS\TEST\DEVELOPMENT\I338_3418\I338_3418_02.xft
1350

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE

COMPOSITE RETURN AFFIDAVIT

dor.sc.gov

I-338

(Rev. 4/18/23)
3418

20

I certify and agree to the following:
1.

I am a nonresident partner of a Partnership, shareholder of an S Corporation, or member of a Limited Liability
Company (LLC).

2.

My name is:
My address is:

Street address

City

State

3.

My Social Security Number (SSN) or Federal Identification Number (FEIN) is:

4.

The income this affidavit and agreement applies to is:

ZIP

Distributed or undistributed South Carolina income from a Partnership.
Distributed or undistributed South Carolina income from an S Corporation.
Distributed or undistributed South Carolina income from an LLC taxed as a Partnership.
Distributed or undistributed South Carolina income from an LLC taxed as an S Corporation.
5.

Entity's name:
Entity's address:

City

Street address
State

ZIP

Entity's FEIN:
6.

I have no source of income taxable to South Carolina other than income from the entity named above.

7.

This affidavit applies for the year January 1 - December 31, _______________ , or for the fiscal tax year
beginning ________________________________ and ending ________________________________ .

I declare under penalty of perjury that I have examined this affidavit and that, to the best of my knowledge and belief, it is true,
correct, and complete.
Under SC Code Section 12-54-44(B)(6)(a), a person who willfully makes and subscribes any return, statement, or other
document that contains, or is verified by, a written declaration made under penalties of perjury that they do not believe to be true
and correct as to every material matter is guilty of a felony and, upon conviction, must be fined not more than $500 or
imprisoned not more than five years, or both, together with the cost of prosecution.

Signature of partner, shareholder, or member

Print name of partner, shareholder, or member

34181024

Date

INSTRUCTIONS
What is a composite return?
A composite return is a single return filed by a Partnership, S Corporation, or LLC taxed as a Partnership or S Corporation
on behalf of two or more nonresident participants.
• Participants are limited to individuals, trusts, or estates who are partners of the Partnership, shareholders of the S
Corporation, or members of an LLC taxed as a Partnership or S Corporation.
• The composite return includes income received by the participant from the Partnership, S Corporation, or LLC.
• Each participant’s tax is determined separately and added together to arrive at the total tax due on the composite
return.
• The composite return must be signed by an authorized partner of the Partnership, an officer of the S Corporation,
or a member of the LLC.
• Determine the participant's South Carolina Income Tax as if it were being separately reported.

Determining the tax due on a composite return
Determine each participant's tax due using one of the following methods:
Method A. The participant provides the I-338, Composite Return Affidavit, to the SCDOR through the entity stating that
no income is taxable to South Carolina other than the income from the entity.
Option 1:
• Prorate the standard deduction or itemized deductions.
• For an individual, multiply the standard or itemized deductions by the South Carolina adjusted gross income,
and divide the result by the federal adjusted gross income.
• For an estate or trust, multiply the standard or itemized deductions by the South Carolina gross income, and
divide the result by the federal adjusted gross income.
• If the participant chooses, tax active trade or business income at the active trade or business income rate.
• Tax all other taxable income using the graduated rate for individuals, estates, and trusts.
Option 2:
• Do not use the standard deduction or itemized deductions.
• If the participant chooses, tax active trade or business income at the active trade or business income rate.
• Tax all other taxable income using the graduated rate for individuals, estates, and trusts.
Method B. The participant does not provide the I-338, Composite Return Affidavit, to the SCDOR through the entity
stating that no income is taxable to South Carolina other than the income from the entity.
• Do not use the standard deduction or itemized deductions.
• Tax active trade or business income at the active trade or business income rate. The “safe harbor” is not
available under Method B.
• Tax all other taxable income at South Carolina's top marginal tax rate for Individual Income Tax for the tax year.

I-338 Composite Return Affidavit Information
Purpose
If the participant completes the I-338, the Partnership, S Corporation, or LLC can use either Option 1 or 2 under Method
A. Without an I-338, the Partnership, S Corporation, or LLC is limited to Method B, and the “safe harbor” is not available
for computing active trade or business income.

Who may submit the I-338
An individual, trust, or estate who is a nonresident partner, shareholder, or member of a Partnership, an S Corporation, or
an LLC taxed as a Partnership or S Corporation, who has no source of income taxable to South Carolina other than from
the entity.
The affidavit should be completed and signed by the participant or by an agent acting on the participant's behalf.

Submitting the I-338
Partners, Shareholders, and Members:
• A qualifying participant should submit the completed I-338 directly to the Partnership, S Corporation, or LLC.
• Do not mail to the SCDOR.
• The I-338 is not valid for subsequent years and must be resubmitted to the entity each year.
Partnerships, S Corporations, and LLCs:
• The Partnership, S Corporation, or LLC must provide all I-338 affidavits to the SCDOR along with the composite
return (SC1040, South Carolina Individual Income Tax Return).
For more information, see SC Revenue Procedure #17-2, available at dor.sc.gov/policy.

Social Security Privacy Act Disclosure
It is mandatory that you provide your Social Security Number on this tax form if you are an individual taxpayer. 42 U.S.C. 405(c)(2)(C)(i)
permits a state to use an individual's Social Security Number as means of identification in administration of any tax. SC Regulation
117-201 mandates that any person required to make a return to the SCDOR must provide identifying numbers, as prescribed, for
securing proper identification. Your Social Security Number is used for identification purposes.
The Family Privacy Protection Act
Under the Family Privacy Protection Act, the collection of personal information from citizens by the SCDOR is limited to the information
necessary for the SCDOR to fulfill its statutory duties. In most instances, once this information is collected by the SCDOR, it is protected
by law from public disclosure. In those situations where public disclosure is not prohibited, the Family Privacy Protection Act prevents
such information from being used by third parties for commercial solicitation purposes.