How Much Is South Carolina State Income Tax?

South Carolina operates a progressive state income tax system, where the tax rate applied to an individual’s earnings increases with income. This structure is designed to distribute the tax burden across different income levels. The state’s income tax framework integrates with federal tax principles while incorporating specific state-level modifications.

Determining South Carolina Taxable Income

Calculating South Carolina taxable income begins with an individual’s federal adjusted gross income (AGI). The state applies various additions and subtractions to this federal AGI to arrive at the South Carolina taxable income. Wages, self-employment earnings, interest, and dividends are generally subject to state taxation.

South Carolina’s approach aligns closely with federal guidelines, accepting many adjustments, exemptions, and deductions allowed on federal returns. This simplifies the process for taxpayers, as their federal taxable income often serves as the starting point for state calculations. Modifications are made for specific items, like certain retirement income or out-of-state gains, which may be treated differently.

South Carolina Income Tax Rates and Brackets

South Carolina employs a graduated income tax system, where different portions of taxable income are taxed at increasing rates. For the 2024 tax year, the state’s income tax rates range from zero to a top marginal rate of 6.2%. South Carolina’s tax brackets do not differentiate by filing status; the same income thresholds and rates apply whether an individual files as single, married, or head of household.

For tax year 2024, the income tax rates and their corresponding brackets are:

0% on taxable income from $0 to $3,460.
3% on taxable income from $3,460 to $17,330.
6.2% on taxable income of $17,330 and above.

This marginal tax system means that only the income falling within a specific bracket is taxed at that bracket’s rate, not the entire taxable income. For instance, income up to $3,460 is not taxed, while the portion of income between $3,460 and $17,330 is taxed at 3%. Any taxable income exceeding $17,330 is then subject to the 6.2% rate.

Key South Carolina Deductions and Exemptions

South Carolina offers various deductions and exemptions that can reduce an individual’s taxable income, thereby lowering their overall tax liability. One notable exemption is for dependents, with a value of $4,790 per eligible dependent for the 2024 tax year. This applies to both qualifying children and qualifying relatives, helping to adjust taxable income based on family size.

Another significant deduction pertains to retirement income. Taxpayers under age 65 can claim a deduction of up to $3,000 for qualified retirement income, while those aged 65 or older may deduct up to $10,000. South Carolina also provides specific subtractions for military retirement income and exempts Social Security benefits from state taxation. These provisions directly reduce the amount of income subject to the state’s tax rates.

Common South Carolina Tax Credits

Beyond deductions and exemptions, South Carolina offers tax credits that directly reduce an individual’s tax liability dollar-for-dollar after the tax has been calculated. These credits differ from deductions, which lower taxable income. One common credit is the Two-Wage Earner Credit, available to married couples filing jointly where both spouses have earned income taxed by South Carolina. For tax year 2023, the maximum amount for this credit was $350.

The state also provides an Earned Income Tax Credit (EITC), which for tax year 2023 was 125% of the federal EITC, provided the taxpayer qualifies for the federal credit. Another available credit is the Child and Dependent Care Credit, calculated at 7% of eligible federal child care expenses. The maximum Child and Dependent Care Credit for 2023 was $210 for one child and $420 for two or more children.

Filing and Payment Options

South Carolina income tax returns are generally due by April 15th of each year for calendar-year filers. If more time is needed to prepare a return, taxpayers can request a six-month filing extension, which typically extends the filing deadline to October 15th. An extension to file is not an extension to pay; any tax due must still be paid by the original April 15th deadline to avoid penalties and interest.

The South Carolina Department of Revenue (SCDOR) provides several methods for filing and paying state income taxes. Taxpayers can file their returns electronically through MyDORWAY, the state’s online portal, or by mail using paper forms. Payments can also be made electronically via MyDORWAY, through electronic funds transfer, or by mailing a check. Estimated tax payments are required if an individual expects to owe $100 or more in tax for the year, typically paid in four equal installments throughout the tax year.