State-by-State Guide to Taxes on Retirees
Tool | December 2020

South Carolina State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

South Carolina

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The Bottom Line
Flag of South Carolina

Most Tax-Friendly

The Palmetto State extends some real southern hospitality to retirees by offering a charming collection of income tax breaks. To start, Social Security benefits are completely exempt. In addition, taxpayers age 65 or older can exclude up to $10,000 of retirement income. Seniors can also deduct $15,000 from other taxable income ($30,000 for joint filers).

Low property tax rates in South Carolina help retirees, too. The statewide median property tax rate is the sixth-lowest amount in the country. Plus, seniors can also claim a homestead exemption for the first $50,000 of their property's fair market value.

The bad news: Sales taxes are on the high end in South Carolina, with an average combined state and local rate of 7.47%.

Income Tax Range

Low: 3% (on taxable income from $3,070 to $6,150)

High: 7% (on taxable income over $15,400)

For 2021, the 3% rate applies to taxable income from $3,110 to $6,220. The 7% rate applies to taxable income over $15,560.

Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

Tax Breaks for Other Retirement Income

Taxpayers age 65 or older can exclude up to $10,000 of retirement income (up to $3,000 for taxpayers under 65). Joint filers can each claim the exemption.

In addition, taxpayers age 65 and older can exclude up to $30,000 of income from a military retirement plan (up to $17,500 for taxpayers under 65). However, excluded military retirement income cannot also be counted toward the general $10,000 retirement income exclusion. Joint filers can each claim the exemption.

Taxpayers age 65 or older can also deduct $15,000 ($30,000 for joint filers) from all taxable income. However, the deduction must be reduced by the amount of retirement income (including military retirement income) excluded as described above.

Railroad Retirement benefits are fully exempt.

Sales Tax

6% state levy. Localities can add as much as 3%, and the average combined rate is 7.47%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 5% (up to $500) infrastructure maintenance fee
Prescription Drugs: Exempt

Real Property Taxes

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 July 15 the year the exemption is claimed.

Annual Car Taxes and Fees

An annual vehicle property tax based on the car's value is imposed. Counties set the rate.

Estate and Inheritance Taxes

No estate or inheritance tax.

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