South Carolina Has a State Income Tax

Yes, South Carolina charges state income tax on wages, investment income, and other earnings. The state tax rate ranges from 0% to 7%, depending on your income bracket. Unlike some states that have no income tax at all, South Carolina residents and anyone earning money in the state must report income to the South Carolina Department of Revenue.

The tax brackets change each year based on inflation adjustments. Your actual rate depends on your filing status (single, married filing jointly, head of household) and your total taxable income. South Carolina also allows you to claim the federal standard deduction or itemize deductions, which can lower the amount of income you owe tax on.

Key Takeaways

  • South Carolina's state income tax ranges from 0% to 7% across seven tax brackets, with rates increasing as income rises.
  • You must file a South Carolina state return if you earned income in the state, even if you do not owe federal tax.
  • The state allows you to deduct the federal standard deduction or itemized deductions from your taxable income.
  • Retirement income, including Social Security and some pension payments, may be partially or fully exempt from state tax depending on your age and income.
  • You can file your state return through the South Carolina Department of Revenue website or use tax software that supports state filing.

How South Carolina's Tax Brackets Work

South Carolina uses seven tax brackets. The lowest bracket starts at 0% for the first portion of your income, and each bracket applies only to the income that falls within that range. For example, if you are single and earn $35,000, you do not pay 7% on all of it—you pay the lower rates on the first portions and only the higher rate on income above certain thresholds.

The exact dollar amounts for each bracket shift yearly. For the 2024 tax year, the brackets for single filers began at $0 and increased through several steps, with the top 7% rate explore to income above a certain threshold. Married couples filing jointly have higher thresholds before entering each bracket. The South Carolina Department of Revenue publishes updated brackets each January on its website, so you can see the current year's ranges before you file.

Because the brackets adjust for inflation, your tax bill may change even if your income stays the same. The state recalculates brackets to prevent "bracket creep," where inflation alone pushes you into a higher rate without any real increase in purchasing power.

Types of Income Subject to South Carolina Tax

South Carolina taxes most forms of income: wages from employment, self-employment income, interest, dividends, capital gains, rental income, and business profits all count. If you worked in South Carolina or earned money from a South Carolina source, you owe state tax on it, regardless of where you live.

Some income is partially or fully exempt. Social Security benefits are not taxed by South Carolina. Military pensions and some federal pensions receive special treatment. If you are 65 or older, you may exclude up to $10,000 of retirement income (including distributions from IRAs, 401(k)s, and certain annuities) from state tax. The South Carolina Department of Revenue website lists all exemptions and the forms you need to claim them.

Filing Requirements and important date

You must file a South Carolina state return if your income exceeds the filing threshold for your status. The threshold changes yearly but is generally lower than the federal threshold. Even if you do not owe federal tax, you may still owe South Carolina tax and must file to report your income.

South Carolina returns are due on the same date as federal returns—typically April 15. If you file for a federal extension, your state extension is automatic. You can file online through the South Carolina Department of Revenue's website, use tax software that supports state filing, or file by mail. The state also offers free filing options for lower-income residents through the IRS Free File program.

Deductions and Credits Available in South Carolina

South Carolina allows you to reduce your taxable income by claiming either the federal standard deduction or your itemized deductions, whichever is larger. You use the same deduction amount you claim on your federal return. This means if you itemize for federal purposes, you itemize for South Carolina too.

The state also offers tax credits for certain situations. A dependent exemption credit applies if you have dependents. Education credits may be available if you paid tuition or student loan interest. The Earned Income Tax Credit (EITC) is available to lower-income workers, and South Carolina's version of the credit is based on the federal credit. You claim these credits on your state return using the same forms or schedules you used federally, or state-specific forms if the credit is South Carolina-only.

What Happens If You Move to or From South Carolina

If you move to South Carolina during the year, you owe state tax only on income earned after you arrived. You file a part-year resident return and report your income by the date you moved. If you leave South Carolina, you file a part-year return for the months you were there and report income earned only during that period.

If you move out of state but still have income from a South Carolina source—such as rental property or a business—you may still owe South Carolina tax on that income. The state taxes income earned within its borders, not just income earned by residents. You would file as a nonresident and report only the South Carolina-source income on your state return.

Where to File and Get Help

The South Carolina Department of Revenue handles all state income tax matters. You can file online through their website, read forms and instructions, or call their taxpayer information line with questions about your specific situation. The website includes a searchable database of tax forms, current tax brackets, and detailed instructions for different filing situations.

If you use tax software, most major programs include South Carolina state filing. The IRS Free File program also includes state filing options for those who meet income limits. If you prefer professional help, a tax preparer or CPA can file your state return along with your federal return.

Frequently Asked Questions

Do I have to pay South Carolina income tax if I work remotely for an out-of-state company?

Yes, if you live in South Carolina and work remotely, you owe state tax on your wages. South Carolina taxes income earned by residents, regardless of where the employer is located. Your employer may or may not withhold South Carolina tax, so check your pay stub and adjust your withholding if needed to avoid owing at tax time.

Is Social Security taxed in South Carolina?

No, Social Security benefits are not subject to South Carolina state income tax. However, other retirement income such as pensions, IRA distributions, and 401(k) withdrawals may be taxed unless you may have access to for an exemption based on age or income.

What if I did not file a South Carolina return in previous years?

Contact the South Carolina Department of Revenue to discuss your situation. The state has a statute of limitations for assessments, but filing back returns can help you avoid penalties and interest. The department can tell you which years you need to file and help you gather the information needed.

Can I claim the same deductions on my South Carolina return that I claim on my federal return?

Yes, you use the same standard deduction or itemized deductions on your state return as you do on your federal return. However, some deductions or credits may have different limits or rules at the state level, so review the South Carolina instructions carefully.

What is the important date to file if I owe money?

Your return is due April 15, the same as your federal return. If you owe tax, you should file and pay by that date to avoid penalties and interest. If you cannot pay in full, the South Carolina Department of Revenue offers payment plans.