South Carolina has a state income tax

Yes, South Carolina charges state income tax on wages, self-employment income, and certain other earnings. The state tax rate ranges from 0% to 7%, depending on your income level. Unlike some states, South Carolina does not have a flat tax — the amount you owe increases as your income increases.

South Carolina also taxes capital gains, dividends, and interest income at the same rates as wages. If you work in South Carolina or live there, you will file a state tax return in addition to your federal return. The state uses a progressive tax system, meaning lower earners pay a lower percentage than higher earners.

Key Takeaways

  • South Carolina state income tax rates range from 0% to 7% depending on your annual income level.
  • You must file a South Carolina tax return if you earned income in the state or lived there during the tax year, even if you owe no tax.
  • The state taxes wages, self-employment income, capital gains, dividends, and interest at the same progressive rates.
  • South Carolina offers a standard deduction and personal exemptions that reduce the income you actually pay tax on.
  • Filing deadlines and payment rules follow the federal calendar — typically April 15 for returns and quarterly payments for self-employed people.

South Carolina income tax brackets and rates

South Carolina uses seven tax brackets. Your rate depends on your filing status (single, married filing jointly, head of household) and your taxable income after deductions and exemptions. The lowest bracket starts at 0% for very low incomes, and the highest bracket is 7% for income above a certain threshold.

The exact dollar amounts for each bracket change each year because they are adjusted for inflation. For the most current brackets, you can check the South Carolina Department of Revenue website or use the tax tables they publish annually. Your employer should also provide guidance if you ask about withholding.

Self-employed people in South Carolina pay both income tax and self-employment tax (which funds Social Security and Medicare). Self-employment tax is a federal obligation, but it affects your South Carolina taxable income because you can deduct half of it.

Who has to file a South Carolina tax return

You must file a South Carolina return if you lived in the state during the tax year and your income exceeded the filing threshold for your situation. The threshold varies by age and filing status. Even if you owe no tax, you may need to file to claim refundable credits or to satisfy state requirements.

If you moved to or from South Carolina during the year, you may owe tax to both South Carolina and another state for the months you lived in each place. You will file a part-year resident return to South Carolina and report your income for only the months you were there. The other state follows the same rule.

If you worked in South Carolina but lived elsewhere, you still owe South Carolina tax on the income you earned there. You will file a nonresident return to South Carolina and report only the income from South Carolina sources.

Deductions and exemptions that reduce your tax

South Carolina allows a standard deduction, which is a flat amount you can subtract from your income before calculating tax. The standard deduction amount depends on your age and filing status and changes each year. You can use the standard deduction or itemize deductions if itemizing results in a larger reduction — you choose whichever is better for you.

The state also allows a personal exemption for yourself and each dependent. Like the standard deduction, the exemption amount changes annually and is adjusted for inflation. These deductions and exemptions stack — you subtract both from your income.

South Carolina offers other deductions for specific situations, such as educator expenses, military pay exclusions, and retirement income exclusions for people over 59½. The South Carolina Department of Revenue publishes a full list of available deductions on their website and in their instruction booklets.

How to file your South Carolina tax return

You can file your South Carolina return by mail or electronically. Most people file electronically because it is faster and reduces errors. You can use tax software, a tax preparer, or the South Carolina Department of Revenue's free file program if your income is below a certain threshold.

Your return is due on the same date as your federal return, typically April 15. If April 15 falls on a weekend or holiday, the deadline moves to the next business day. If you cannot file by the deadline, you can request an extension, but an extension to file is not an extension to pay — taxes owed are still due by April 15.

Mail returns to the South Carolina Department of Revenue at the address listed in the tax instruction booklet. Electronic filers receive confirmation within a few days. The state processes returns and issues refunds within four to six weeks if you file electronically and claim a refund.

Refunds and payment options

If you overpaid South Carolina tax during the year through withholding or estimated payments, you will receive a refund. You can choose to receive the refund by check or direct deposit to your bank account. Direct deposit is faster — typically two to three weeks instead of four to six weeks for a check.

If you owe tax, you can pay online through the South Carolina Department of Revenue website, by mail with your return, or by phone. Paying online or by phone may include a processing fee charged by the payment processor, not by the state. The state does not charge a fee for mailed payments.

If you cannot pay the full amount by the deadline, you can request a payment plan. The state charges interest and penalties on unpaid tax, so paying as soon as possible reduces what you ultimately owe. Contact the South Carolina Department of Revenue to discuss payment options.

Frequently Asked Questions

Does South Carolina tax Social Security benefits?

No. South Carolina does not tax Social Security benefits, even if you have other income. This is one of the few income sources the state does not tax. However, your federal return may still require you to report Social Security income, and it may affect whether other income is taxable.

What if I moved to South Carolina mid-year?

You file a part-year resident return and report only the income you earned while living in South Carolina. You will also file a return in your previous state for the months you lived there. Both states will tax only the income earned during the time you were a resident.

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

If you live in South Carolina and work remotely, you owe South Carolina tax on your wages regardless of where your employer is located. Your employer may not withhold South Carolina tax automatically, so you may need to make estimated quarterly payments or adjust your withholding to avoid owing a large amount at tax time.

Can I deduct federal income tax from my South Carolina return?

No. South Carolina does not allow a deduction for federal income tax paid. You can only deduct state and local taxes (SALT) if you itemize deductions on your federal return, and that deduction appears on your federal return, not your South Carolina return.

What happens if I file late or pay late?

The state charges penalties and interest on late payments. The penalty is typically a percentage of the unpaid tax, and interest accrues daily. If you cannot file or pay on time, contact the South Carolina Department of Revenue to discuss options — the state may reduce penalties in certain situations.