I'm posting this after 2 hours of digging and troubleshooting in case someone else has this issue. If you receive the error in SCCM 2012 SP1 on Windows Server 2012 Std in the WCM.log file :
System.Net.WebException: Unable to connect to the remote server ---> System.Net.Sockets.SocketException: No connection could be made because the target machine actively refused it 10.0.0.1:8530
When you install WSUS for SCCM everyone and every technet forum says let SCCM configure it for you. This is true..... to an extent. However in Windows Server 2012 after you install WSUS in Server Manager youMUST complete Post-Installation tasks If you do not do this the WSUS content folder will not be created, the WSUS website will not be created and you will never be able to properly sync your updates.
I hope this helps someone else!
EDIT: *Could a MOD please move this post?*