South Carolina’s income tax system has specific rules for earnings, deductions, and credits that differ from federal taxation. Understanding these rules is important for financial planning and complying with state law.
Filing Threshold and Residency Requirements
Whether you need to file a South Carolina individual income tax return depends on your residency status and gross income. A resident is someone whose permanent home is in South Carolina or who spends more than 183 days in the state during the year.
If you are required to file a federal return, you will also need to file a South Carolina return. These filing thresholds can change with federal tax law adjustments.
Nonresidents who earn income from South Carolina sources, like wages for work done in the state, rental income from South Carolina properties, or business income, must file a nonresident return.
Part-year residents—those who move into or out of South Carolina during the tax year—must report income earned while a resident and any South Carolina-sourced income earned as a nonresident.
The federal Military Spouses Residency Relief Act (MSRRA) allows some military spouses to keep their prior state of legal residence for tax purposes while in South Carolina with a stationed service member.1Military OneSource. Military Spouses Residency Relief Act Income the spouse earns from South Carolina sources is taxable by the state unless specific MSRRA exemption conditions are met. A service member’s military income is taxed by their state of legal residence.
Tax Brackets and Rate Calculation
South Carolina uses a progressive income tax system, where the tax rate increases with taxable income. For the 2024 tax year, the income brackets and rates are the same for all filing statuses, including single, married filing jointly, and head of household.
The calculation for South Carolina income tax starts with your federal taxable income. South Carolina follows most federal tax rules but has some state-specific modifications.
For the 2024 tax year, the top marginal individual income tax rate is 6.2 percent. Tax brackets are adjusted annually for inflation. The South Carolina Department of Revenue provides tax tables (Form SC1040TT for 2024) to help determine tax based on taxable income.
For 2024, the income tax rates are 0 percent for taxable income from $0 to $3,460; 3 percent for income from $3,461 to $17,330; and 6.2 percent for income of $17,331 and above.2South Carolina Department of Revenue. SC1040TT Tax Tables for 2024
While there may be discussions about future changes to South Carolina’s income tax structure, the graduated rates for 2024 are currently in effect. Always consult the South Carolina Department of Revenue for the most current information for the tax year you are filing.
Deductions and Credits
After calculating South Carolina taxable income, several state deductions and credits can reduce the tax owed. Some are similar to federal provisions, while others are specific to South Carolina.
South Carolina follows federal guidelines for standard or itemized deductions. For 2024, the state uses federal standard deduction amounts, and if you itemize federally, you use the same figures for your state return. Taxpayers aged 65 and older can deduct up to $15,000 from their income.3South Carolina Department of Revenue. Retiree Tax Tips: Lower Your Individual Income Tax Bill If both spouses on a joint return are 65 or older, they can each claim this deduction, for a total of up to $30,000.
Individuals under age 65 with permanent and total disability retirement income can deduct up to $5,200 annually. Military retirement pay is also deductible: up to $17,500 for those under age 65, and up to $30,000 for those age 65 and older. Contributions to the South Carolina College Investment Program (Future Scholar 529 Plan) or the South Carolina Tuition Prepayment Program are fully deductible with no dollar limit.
Parents can claim a deduction for each dependent child under six, based on the pre-suspension federal personal exemption amount for that child for the 2024 tax year.
Tax credits provide a dollar-for-dollar reduction in the tax owed after deductions. Married couples filing jointly where both spouses have earned income may qualify for the Two-Wage Earner Credit. This credit is 0.7 percent of the lesser of $50,000 or the South Carolina qualified earned income of the lower-earning spouse, capped at $350.4Justia Law. South Carolina Code Section 12-6-3330: Two Wage Earner Credit
Parents can claim the nonrefundable Child and Dependent Care Credit, which is 7 percent of allowable federal child and dependent care expenses. A nonrefundable higher education credit is available for 50 percent of tuition paid to a South Carolina institution, up to $1,500 per year per student. Review forms SC1040 and SC1040TC, and the Department of Revenue website for details on other available credits.
Withholding and Estimated Tax Obligations
South Carolina income tax obligations are met throughout the year by wage withholding or estimated tax payments.
Employers deduct and remit South Carolina income tax from employee paychecks. The amount withheld is based on Form SC W-4, South Carolina Employee’s Withholding Allowance Certificate, and state withholding tables.
Individuals with income not subject to withholding (e.g., from self-employment, contracting, or significant investment income) must pay estimated tax if they anticipate owing $100 or more in state income tax after withholding and credits.
Estimated tax payments are made quarterly using Form SC1040ES, Estimated Tax for Individuals, to pay tax liability evenly throughout the year. This involves projecting annual income and expected tax after South Carolina adjustments.
To avoid underpayment penalties, you must pay through withholding and estimated payments at least 90 percent of the current year’s tax due or 100 percent of the prior year’s tax (110 percent if prior year’s SC adjusted gross income was over $150,000, or $75,000 if married filing separately).5Justia Law. South Carolina Code Section 12-6-3910: Estimated Tax Payments and Penalties Quarterly due dates are April 15, June 15, September 15, and January 15.
Nonresidents with South Carolina-sourced income not subject to withholding, such as rental or pass-through business income, may need to make estimated payments. Some pass-through entities may be required to withhold taxes for their nonresident owners.
Estimated tax payments can be made online via SCDOR’s MyDORWAY portal, by mail with Form SC1040ES, or by credit card/electronic funds withdrawal through approved processors. Keep accurate records of income, withholding, and estimated payments.
Penalties for Noncompliance
Not complying with South Carolina’s income tax laws can result in penalties, including fines and, in severe cases, criminal charges. The South Carolina Department of Revenue (SCDOR) enforces these laws.
Failing to file a tax return by the due date (including extensions) incurs a penalty of 5 percent of the tax due for each month the return is late, up to 25 percent of the unpaid tax.6Justia Law. South Carolina Code Section 12-54-43: Civil Penalties for Tax Returns
Failing to pay the tax due by the deadline results in a penalty of 0.5 percent of the unpaid tax per month, capped at 25 percent. Both penalties can apply if you fail to file and pay. Interest is charged on unpaid tax from the due date until paid.
Inaccurate returns can lead to penalties. A 5 percent penalty on the underpayment (plus 50 percent of the interest due on it) applies if due to negligence. A substantial understatement of tax (more than 10 percent of tax required or $5,000) results in a 25 percent penalty on the understated amount.
Tax fraud incurs a civil penalty of 75 percent of the fraudulent underpayment. Willful tax evasion or failure to pay withheld taxes is a felony, with potential fines up to $10,000, imprisonment up to five years, or both, plus costs.7Justia Law. South Carolina Code Section 12-54-44: Criminal Tax Penalties Filing or assisting with a false return can also lead to criminal charges.
Other actions can trigger penalties. A bad check incurs a penalty: the greater of $25 or 2 percent of the check’s amount (if $1,250 or more); if the check is less than $25, the penalty is the check amount.8Justia Law. South Carolina Code Section 12-54-50: Penalty for Insufficient Funds Checks Filing a frivolous return can lead to penalties of $500 for the first instance, $2,500 for the second, and $5,000 for subsequent filings.
The SCDOR may waive penalties if you show reasonable cause, but interest charges are usually not waivable. Address SCDOR notices promptly to avoid more penalties, interest, and collection actions like wage levies or property liens.
Refund or Additional Payment Procedures
After filing your South Carolina income tax return, you will either receive a refund or owe an additional tax payment.
If you overpaid your taxes, you are due a refund. The South Carolina Department of Revenue (SCDOR) recommends direct deposit for the quickest and safest refund. You can provide bank account details on your return for this. Alternatively, a paper check can be mailed. Debit cards are no longer an option for receiving refunds.
Refund processing times vary. E-filed returns are processed within six to eight weeks from the filing date or from February 3rd (when processing usually begins), whichever is later. Paper-filed and amended returns take longer; amended returns need at least 12 weeks. You can check your refund status on the SCDOR’s online Where’s My Refund tool using your Social Security Number (or ITIN) and the exact refund amount.
Your refund amount might differ from what you calculated if the SCDOR finds errors or if you have outstanding debts with other state agencies, public colleges, or the IRS. Your refund may be reduced to cover these debts, and you’ll receive an explanatory notice. You can also choose on Form SC1040 to apply some or all of your overpayment to next year’s estimated tax.
If your return shows a balance due, you must pay the SCDOR by the tax filing deadline to avoid extra charges. The main due date is April 15th, but for the 2024 tax year (filed in 2025), it was extended to May 1, 2025, due to Hurricane Helene.9South Carolina Department of Revenue. SCDOR Issues Tax Relief Due to Hurricane Helene The SCDOR recommends using its MyDORWAY online portal for payments via bank account or credit/debit card (card payments may have a processing fee).
You can also mail payments with Form SC1040-V, South Carolina Individual Income Tax Payment Voucher. Make checks or money orders payable to SCDOR and include your Social Security number, tax year, and SC1040-V on the memo line. Only checks from U.S. banks are accepted. If you cannot pay your full tax liability by the due date, the SCDOR offers payment plans, which have a $45 application fee that is applied to your outstanding balance.10South Carolina Department of Revenue. Payment Plan Request Information