South Carolina State Taxes: Income, Sales, Property, and Credits

South Carolina state taxes include an individual income tax, a 6 percent state sales and use tax with local add-ons, and county-collected property tax that runs on state-set assessment ratios. For 2026, the income tax picture changed significantly: Act 110 of 2026 (H. 4216) cut the top marginal rate to 5.21 percent, added a lower 1.99 percent bracket, and replaced the state’s tie-in to the federal standard deduction with a new South Carolina Income Adjusted Deduction.¹² Everything is administered by the South Carolina Department of Revenue (SCDOR).

Individual Income Tax

South Carolina taxes the income of individuals, estates, and trusts under SC Code Section 12-6-510.³ Residents owe tax on all income regardless of where it was earned. Nonresidents pay only on income sourced within the state, and part-year residents split the calculation based on how long they lived in South Carolina during the year. Your state return starts with your federal taxable income and then applies South Carolina-specific modifications.⁴

The 5.21 percent top rate and 1.99 percent lower bracket introduced by Act 110 are part of a phased approach that sets standards for further reductions in future years.¹

The South Carolina Income Adjusted Deduction

For 2026, South Carolina decoupled from federal standard and itemized deductions. The new South Carolina Income Adjusted Deduction (SCIAD) takes their place.² The base amounts are:

Single or married filing separately: $15,000
Head of household: $22,500
Married filing jointly or surviving spouse: $30,000

The SCIAD phases out as federal adjusted gross income rises. Single filers lose the deduction gradually between $40,000 and $95,000. Head of household filers phase out from $60,000 to $142,500. Joint filers phase out between $80,000 and $190,000.⁵ Above those ceilings, you get no SCIAD at all. That’s a real change from the old system, where higher earners could still claim the full federal standard deduction on their state return.

Dependent Exemption

South Carolina allows a per-dependent exemption for each qualifying child and qualifying relative. For the 2025 tax year, the amount was $4,930 per dependent.⁶ The 2026 figure may be adjusted; check the SCDOR site when filing.

Retirement Income

South Carolina is comparatively generous to retirees. Social Security benefits that are taxable on your federal return are fully exempt from South Carolina income tax, claimed directly on your state return.⁷ Military retirement pay is also fully exempt.⁸

Beyond those full exemptions, income from a qualifying retirement account can be deducted up to $3,000 per year before age 65 and up to $10,000 per year after turning 65.⁷ The deduction applies to pensions, IRAs, and similar accounts. Stacked together, these provisions can significantly reduce or eliminate a retiree’s state tax bill.

Sales and Use Tax

South Carolina’s statewide sales tax rate is 6 percent on the retail sale of tangible personal property.⁹ If you buy from an out-of-state retailer that didn’t collect sales tax, you owe use tax at the same rate on anything stored, used, or consumed in South Carolina.

Local jurisdictions can add their own sales tax for transportation projects and capital improvements. Some counties add up to 3 percent, pushing the combined rate as high as 9 percent in certain areas. Retailers collect the full combined amount at the register and remit it to the SCDOR.

Annual Sales Tax Holiday

Every year South Carolina holds a sales tax-free weekend beginning the first Friday in August and running through midnight on Sunday. For 2026, the dates are August 7 through 9. Clothing, footwear, school supplies, computers and printers, and select bed and bath items are exempt from both state and local sales tax during the holiday, with no price cap on eligible items. The exemption does not cover items purchased for business use or items on layaway.

Property Tax

Property tax is billed and collected at the county level, but the state sets the framework through classification and assessment ratios. Your bill equals the assessed value of the property multiplied by your county’s millage rate.

Assessment Ratios

The assessment ratio makes a large difference. An owner-occupied primary residence (a “legal residence”) is assessed at 4 percent of fair market value, covering the home and up to five contiguous acres.¹⁰ Other real property, including second homes, rental properties, and commercial sites, is assessed at 6 percent. Personal vehicles are also assessed at 6 percent for annual property tax.¹¹

The 4 percent legal residence rate is not automatic. You have to file an application with your county assessor. Deadlines vary by county, with a typical cutoff of January 15. If you recently bought a home and haven’t filed, you may be paying at the 6 percent rate unnecessarily.

Homestead Exemption

Homeowners who are 65 or older, totally and permanently disabled, or legally blind qualify for a homestead exemption that eliminates property tax on the first $50,000 of the home’s fair market value.¹² Contact your county auditor’s office to apply.

Common Tax Credits

Two widely used credits directly reduce your state tax rather than just your taxable income.

The two-earner credit is available to married couples filing jointly where both spouses have earned income taxed in South Carolina. It equals 0.7 percent of the lesser of $50,000 or the qualifying earned income of the lower-earning spouse, producing a maximum credit of $350.¹³ It’s not available to single filers, head of household filers, or those filing separately.

The child and dependent care credit equals 7 percent of qualifying child and dependent care expenses for full-year residents. The maximum is $210 for one child or $420 for two or more.¹³ Modest amounts, but easy to miss.

Filing Your Return

You generally need to file a South Carolina return if you were required to file a federal return.⁶ The main form is the SC1040. Because the calculation starts from federal taxable income, complete your federal return first. For 2026, apply the SCIAD in place of the old federal standard deduction on the state form.²

Have your W-2s, 1099s, and Social Security numbers ready before starting. Your filing status on the state return must match the federal return. If you want direct deposit, verify your routing and account numbers.

The fastest route is the MyDORWAY online portal, which also lets you check refund status and view prior-year returns.¹⁴ Electronic filers generally see faster refunds than paper filers.

Deadlines, Extensions, and Estimated Payments

Filing Deadline

The standard due date is April 15 following the close of the tax year. For the 2025 tax year (returns filed in 2026), the SCDOR extended the deadline to October 15, 2026 to give taxpayers and preparers time to adapt to H. 4216.¹⁵ Check the SCDOR site for whether a similar extension applies to 2026 returns.

Extensions

South Carolina grants a six-month filing extension. Request one through MyDORWAY by selecting the “Extension Payment” option when making a payment, which submits the extension automatically, or mail a completed SC4868.¹⁵ The extension gives you more time to file, not more time to pay. Any unpaid balance after the original due date accrues penalties and interest.

Estimated Tax Payments

If you expect to owe $100 or more when you file the SC1040, quarterly estimated payments are required.¹⁶ This mainly affects the self-employed, landlords, and anyone with significant income that isn’t subject to withholding. Calendar-year quarterly due dates are:

First quarter: April 15
Second quarter: June 15
Third quarter: September 15
Fourth quarter: January 15 of the following year

You’re exempt from the estimated tax requirement if your prior-year tax liability was zero for a full 12-month year.¹⁶

Penalties for Late Filing or Payment

South Carolina penalties add up quickly. The late filing penalty is 5 percent of the tax owed for each month or partial month the return is late, capped at 25 percent.¹⁷ The late payment penalty is 0.5 percent per month, also capped at 25 percent. Both can run at the same time, so filing late without paying is the worst combination.

Interest accrues on any unpaid balance. South Carolina’s interest rate matches the federal underpayment rate under the Internal Revenue Code, so it moves with broader conditions.¹⁷ If you can’t pay in full by the deadline, filing on time and paying what you can is the cheaper path, since it avoids the much steeper filing penalty.

1
South Carolina Legislature. House Bill 4216
2
South Carolina Department of Revenue. Information About H. 4216
3
South Carolina Legislature. South Carolina Code 12-6-510 – Tax Rates for Individuals, Estates, and Trusts for Taxable Years After 1994
4
South Carolina Department of Revenue. 2025 Individual Income Tax Return
5
South Carolina Legislature. H4216 Fiscal Impact Statement – Amended
6
South Carolina Department of Revenue. Individual Income Tax
7
South Carolina Department of Revenue. Retirees – Lower Your Individual Income Tax Bill With These Five Tips
8
MyArmyBenefits. South Carolina Military and Veterans Benefits
9
South Carolina Department of Revenue. Sales and Use Tax Index
10
South Carolina Legislature. South Carolina Code 12-43-220 – Classifications Shall Be Equal and Uniform; Particular Classifications and Assessment Ratios
11
South Carolina Revenue and Fiscal Affairs Office. Property Tax FAQ
12
South Carolina Department of Revenue. Exempt Property
13
South Carolina Department of Revenue. Take Advantage of These Family Tax Credits and Deductions
14
South Carolina Department of Revenue. MyDORWAY
15
South Carolina Department of Revenue. IIT File and Pay Options
16
South Carolina Department of Revenue. Individual Declaration of Estimated Tax
17
South Carolina Legislature. South Carolina Code Title 12 Chapter 54 – Uniform Method of Collection and Enforcement of Taxes Levied and Assessed by Department of Revenue