South Carolina does not tax Social Security benefits
South Carolina has no state income tax on Social Security payments. If you receive Social Security retirement, survivor, or disability benefits, the state will not take a portion of those payments. This applies whether you are a full-time resident, part-time resident, or moved to South Carolina after you started collecting.
The federal government may tax your Social Security depending on your total income for the year, but that is separate from state tax. South Carolina's exemption covers only the state portion — you still owe federal tax if your combined income crosses the federal threshold.
This rule has been in place for decades and does not change based on when you started collecting or how much you receive each month.
Key Takeaways
- South Carolina does not tax Social Security income at the state level, regardless of how much you receive.
- Federal tax on Social Security is still possible if your total income exceeds the federal threshold, and that is separate from state tax.
- The exemption applies to all types of Social Security: retirement, survivor benefits, and disability payments.
- Moving to South Carolina after you start collecting does not change this — the state will not retroactively tax past payments.
- Other retirement income, such as pensions and 401(k) withdrawals, may be taxed by South Carolina depending on the source.
How federal tax on Social Security works
The federal government taxes Social Security if your combined income exceeds a certain amount. Combined income means your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. The threshold depends on your filing status.
For single filers, if combined income is between $25,000 and $34,000, you may owe tax on up to 50 percent of your benefits. If combined income exceeds $34,000, you may owe tax on up to 85 percent of your benefits. For married couples filing jointly, the thresholds are $32,000 and $44,000.
You receive a Form SSA-1099 each January showing the amount of Social Security you received the previous year. You use this form to calculate whether you owe federal tax when you file your return.
What counts toward your combined income
Combined income includes wages, self-employment income, interest, dividends, capital gains, and distributions from retirement accounts. It also includes income from pensions, annuities, and rental property.
Some income does not count: Supplemental Security Income (SSI) does not count, and certain municipal bond interest does not count. If you are unsure whether a specific income source counts, the IRS worksheet on Form 1040 instructions walks through the calculation.
South Carolina does not add its own layer to this calculation — the state straightforward does not tax Social Security at all, so your state return does not affect whether you owe federal tax on your benefits.
Other retirement income that South Carolina does tax
While Social Security is exempt, South Carolina taxes most other retirement income. Military pensions are fully taxable at the state level. Federal employee pensions are also taxable. Private pensions from employers are taxable unless they are from a railroad retirement plan.
Withdrawals from 401(k) plans, traditional IRAs, and 403(b) plans are taxed as ordinary income by South Carolina. Withdrawals from Roth IRAs are not taxed if the account has been open for at least five years and you are 59½ or older, but early withdrawals may be taxed.
South Carolina does offer a limited deduction for retirement income if you are 65 or older and your income falls below a certain threshold, but the deduction is modest and phases out quickly as income rises. You must report all retirement income on your state return even if you do not owe tax on it.
How to report Social Security on your South Carolina return
You do not need to report Social Security income on your South Carolina state return because the state does not tax it. However, you must still file a federal return if your total income exceeds the filing threshold, and you will report your Social Security there.
If you file a South Carolina return for other reasons — because you have other income, or because you want to claim a refund — you can leave the Social Security line blank. The state form does not require you to list it.
Keep your Form SSA-1099 with your tax records. If South Carolina ever audits your return, having this form shows that you reported your Social Security correctly on your federal return.
Moving to South Carolina and Social Security tax
If you move to South Carolina from another state that does tax Social Security, your Social Security payments are not retroactively taxed by South Carolina. You owe tax only to the state where you lived when you received the payment.
Some states tax Social Security income — Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont all tax at least some Social Security benefits depending on income level. If you moved from one of these states, you may have owed tax there in previous years, but South Carolina will not tax your benefits going forward.
Update your address with the Social Security Administration and with your employer or financial institution if you receive pension or retirement account distributions. This ensures your tax documents go to the correct address.
Frequently Asked Questions
Will I owe South Carolina state tax if I move there while collecting Social Security?
No. South Carolina does not tax Social Security income, so you will not owe state tax on your benefits regardless of when you move there or how long you have been collecting. You may still owe federal tax depending on your total income.
What if I worked in South Carolina but now live in another state and collect Social Security?
Your Social Security is not taxed by South Carolina even if you worked there. Social Security is a federal benefit, and South Carolina does not tax it regardless of where you live or where you worked. You owe tax only to your current state of residence if that state taxes Social Security.
Does South Carolina tax my spouse's Social Security if we file jointly?
No. South Carolina does not tax Social Security for anyone, including spouses who receive spousal or survivor benefits. The exemption applies to all types of Social Security payments.
If I do not owe federal tax on my Social Security, do I still have to report it to South Carolina?
No. Since South Carolina does not tax Social Security, you do not report it on your state return. You only report it on your federal return if you file one, which you must do if your total income exceeds the federal filing threshold.
Are there any South Carolina tax credits or deductions for people who collect Social Security?
South Carolina offers a limited retirement income deduction for residents 65 and older, but it applies to other retirement income like pensions and IRA withdrawals, not Social Security. The deduction phases out as income rises and is modest compared to other states.