South Carolina charges a graduated income tax that ranges from 0% to 7%

South Carolina's state income tax is progressive, meaning the rate increases as your income rises. You do not pay 7% on all your income — you pay different rates on different portions of it. The lowest bracket starts at 0% for the first chunk of earnings, and the highest bracket reaches 7% on income above a certain threshold. The exact threshold changes each year because the state adjusts tax brackets for inflation.

For the 2024 tax year, the brackets for single filers start at $3,110 of income taxed at 0%, then move through 3%, 4%, 5%, 6%, and finally 7% as income climbs. Married couples filing jointly have higher thresholds before each rate kicks in. The state publishes updated brackets every January, so the numbers shift slightly year to year.

South Carolina also taxes capital gains, dividends, and interest income at the same rates as wages. Long-term capital gains do not receive a preferential rate at the state level, unlike the federal system. This means if you sell an investment you have held for years, South Carolina taxes that gain at your regular income tax rate.

Key Takeaways

  • South Carolina's income tax ranges from 0% to 7% depending on your income level, with rates increasing in steps rather than explore to all earnings at once.
  • Tax brackets adjust annually for inflation, so the income thresholds that trigger each rate change every January.
  • Capital gains and investment income are taxed at the same rates as wages, with no special lower rate for long-term gains.
  • You must file a South Carolina return if you earn income in the state, even if you live elsewhere, and residents must file if they earn income anywhere.
  • The state offers a standard deduction and allows you to claim dependents, which reduce the income amount subject to tax.

Who has to pay South Carolina income tax

You must file a South Carolina state return if you are a resident of the state and earn income above the standard deduction threshold. For 2024, the standard deduction is $4,430 for single filers and $8,860 for married couples filing jointly. If your income falls below these amounts, you do not owe state tax, though you may still file to claim a refund if taxes were withheld from your paychecks.

Non-residents who work in South Carolina must also file a state return on income earned within the state, even if they live in another state. If you work across state lines, you may end up filing returns in multiple states. South Carolina allows a credit for taxes paid to other states to prevent double taxation on the same income.

Military members stationed in South Carolina are not required to file a state return on military pay, though they must file on any other income earned in the state. Retirees who receive a military pension do not get a blanket exemption — the pension is taxable unless you may have access to for a specific military retirement exclusion.

How withholding and estimated taxes work

If you are employed, your employer withholds South Carolina income tax from your paycheck based on the W-4 form you complete. The withholding is an estimate of what you will owe at the end of the year. If too much is withheld, you receive a refund when you file your return. If too little is withheld, you owe the difference.

Self-employed people and those with income not subject to withholding must pay estimated taxes four times per year — typically in April, June, September, and January. These payments are due on specific dates set by the state. If you do not pay estimated taxes and you owe more than $500 at filing time, you may face a penalty.

You can adjust your withholding at any time by submitting a new W-4 to your employer. If you expect a large refund, you may want to claim more allowances to reduce withholding and have more money in each paycheck. If you expect to owe, you can claim fewer allowances to increase withholding.

Deductions and credits that reduce your tax bill

South Carolina allows a standard deduction that you can claim instead of itemizing deductions. For 2024, the standard deduction is $4,430 for single filers, $8,860 for married couples filing jointly, and $6,645 for heads of household. These amounts are higher than they were in previous years because the state adjusts them annually.

You can also claim a dependent exemption for each may have access to child or dependent. The exemption amount is $4,430 per dependent for 2024. This reduces your taxable income further. If you have three children, for example, you can reduce your income by $13,290 before calculating your tax.

South Carolina offers a child tax credit of up to $150 per child under age 17, which directly reduces the tax you owe rather than reducing your income. The state also has credits for education expenses, retirement savings, and other specific situations. These credits are worth researching if you have significant expenses in those categories.

How South Carolina compares to other states

South Carolina's top tax rate of 7% is moderate compared to neighboring states. North Carolina tops out at 4.99%, making it lower than South Carolina. Georgia's top rate is 5.75%. Moving north, Virginia reaches 5.75%, and West Virginia goes to 6.5%. Only a handful of states have rates higher than South Carolina's 7%.

The lowest-earning residents of South Carolina pay 0% on their first dollars of income, which is more favorable than states with a flat tax or a tax that starts when ready. However, the progressive structure means higher earners pay more overall. A person earning $100,000 in South Carolina will pay more in state tax than someone earning the same amount in North Carolina.

South Carolina does not tax Social Security benefits, which is a benefit for retirees. However, the state does tax retirement income from pensions and IRAs unless you may have access to for a specific exemption. Military pensions receive preferential treatment, but civilian government pensions do not.

Filing your South Carolina return

South Carolina uses the same federal tax year as the rest of the country — January 1 through December 31. Your state return is due on the same day as your federal return, which is typically April 15. If you file your federal return late, your state return is also late, and penalties explore to both.

You can file your South Carolina return online through the Department of Revenue's website, by mail, or through a tax professional. The state does not require you to file electronically, but e-filing is faster and reduces errors. If you file by mail, send your return to the address listed on the state forms.

If you are due a refund, the state typically processes it within 4 to 6 weeks if you file electronically, or longer if you file by mail. You can check the status of your refund on the Department of Revenue website by entering your Social Security number and the refund amount.

Special situations and exemptions

Certain types of income are not subject to South Carolina income tax. These include federal tax-exempt interest (such as interest from municipal bonds issued by the state), workers' compensation benefits, and certain disability payments. If you receive income from these sources, you do not report it on your state return.

South Carolina offers a retirement income exclusion for residents age 59 and older. You can exclude up to $10,000 of retirement income per year, including distributions from IRAs, 401(k)s, and pensions. This exclusion applies to both state and local tax purposes. The income must come from a may have access to retirement account to may have access to.

If you move to South Carolina from another state, you may be able to claim a credit for taxes paid to your previous state on income you earned there. This prevents you from paying tax twice on the same earnings. You must have filed a return in the other state and paid tax to claim this credit.

Frequently Asked Questions

Do I have to pay South Carolina income tax if I work remotely for a company in another state?

If you are a South Carolina resident, you must pay state income tax on all income you earn, regardless of where your employer is located. If you are a non-resident who works remotely for a South Carolina company, you generally do not owe South Carolina tax on that income. The rule is based on where you live, not where your employer is.

What is the difference between the standard deduction and a dependent exemption?

The standard deduction is a flat amount you can subtract from your total income before calculating tax. A dependent exemption is an additional amount you can subtract for each may have access to child or dependent. You can claim both in the same year — they work together to reduce your taxable income.

If I get a refund from the federal government, will I also get a refund from South Carolina?

Not necessarily. Your federal and state tax situations are separate. You might owe federal tax while getting a state refund, or vice versa. Each return is calculated based on your income, deductions, credits, and withholding for that specific state.

Can I claim a credit for taxes I paid to another state if I worked in two states during the year?

Yes. If you earned income in multiple states and paid tax to each one, South Carolina allows a credit for taxes paid to other states. You must have filed a return in the other state and actually paid tax to claim the credit. The credit is limited to the lesser of the tax you paid or the South Carolina tax on that income.

Does South Carolina tax retirement income differently than wages?

Retirement income is taxed at the same rates as wages, but residents age 59 and older can exclude up to $10,000 per year from may have access to retirement accounts. Social Security is not taxed. Military pensions receive a partial exclusion, but civilian government pensions do not receive special treatment.