Tool | October 2016

State-by-State Guide to Taxes on Retirees

Our comprehensive guide to taxes on retirement income, property and purchases, as well as special tax breaks for seniors, in every state.

South Carolina

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The Bottom Line
Map of South Carolina


The Palmetto State extends its Southern hospitality to retirees. The state does not tax Social Security benefits and provides a generous retirement-income deduction when calculating state income tax. It is also phasing in a new deduction for military retirement income over the next few years. State income tax rates are reasonable, and property taxes are very low. Senior homeowners qualify for a homestead exemption.

State Sales Tax

6% state levy. Localities can add as much as 2.5%, and the average combined rate is 7.72%, according to the Tax Foundation.

Income Tax Range

Low: 3% (on taxable income over $2,920)

High: 7% (on taxable income over $14,600)

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Other retirement income is taxed, with limits. If you're younger than 65, up to $3,000 in retirement income is exempt. Older seniors are eligible for two deductions. If you are 65 or older, you may deduct up to $10,000 in qualifying retirement income. Qualified income includes public employee retirement plans, Keogh plans, IRA distributions and military retirement benefits. In addition, if you are 65 or older, you can take a senior deduction of $15,000 (single filers) or $30,000 (married couples filing jointly) -- but the $15,000 deduction must be offset by the amount taken with the retirement-income deduction. So if a single taxpayer takes a $10,000 retirement-income deduction, he can only take a senior deduction of $5,000 -- for a total deduction of $15,000. A surviving spouse may continue to take a retirement deduction on behalf of the deceased spouse. Some taxpayers 65 and older may not have to file a tax return if they meet certain conditions. Retired military personnel are eligible for a deduction on their military retirement benefits, and that deduction will be rising in the next few years. For the 2016 tax year, for taxpayers under age 65, the deduction is $5,900, but increases by $2,900 each year until it is fully phased in at $17,500 in 2020. For taxpayers 65 and older, the deduction for 2016 is $18,000, but it will increase by $3,000 each year until it is fully phased in at $30,000 in 2020.


Qualifies for the retirement-income exemptions.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Qualifies for the retirement-income exemptions.

Private Pensions

Qualifies for the retirement-income exemptions.

Public Pensions

Qualifies for the retirement-income exemptions.

Property Taxes

Median property tax on South Carolina's median home value of $139,200 is $788.

Tax breaks for seniors: For homeowners 65 and older, the state's homestead exemption allows the first $50,000 of a property's fair market value to be exempt from local property taxes. To qualify, you must have been at least 65 years old and a legal resident of South Carolina for one year, as of December 31 of the preceding year.

Inheritance and Estate Taxes

There is no inheritance tax or estate tax.