South Carolina State Income Tax Guide (2026)

South Carolina's 3-tier structure is the result of multi-year reform under the 2022 tax reform package. Prior to reform, SC had 6 brackets topping out at 7%. The phase-down trajectory: 7% (2022) → 6.5% (2023) → 6.4% (2024) → 6.3% (2025) → 6% (2026, the endpoint per current schedule). Further reductions to 5% or below are politically possible but not legislated. The current structure: 0% on the first $3,640 of taxable income, 3% from $3,640 to $18,230, and 6% above $18,230. Brackets are inflation-indexed annually.

The 0% bracket on the first $3,640 is a small but real benefit. A $100K SC single filer pays roughly: $0 on first $3,640 + 3% × ($18,230 - $3,640) + 6% × ($100,000 - $18,230 - $16,100 federal SD) = roughly $4,400 — effective rate ~4.4%. The post-SD effective rate is appreciably below the headline 6% top because of the lower brackets and the federal-conforming SD.

Property tax is the structural SC advantage that most state-comparison rankings miss. SC uses a tiered assessment ratio system: 4% of fair market value for primary residences (owner-occupied), 6% for second homes and rental property, 10.5% for commercial. Apply the local mill rate (typically 5-6.5% combined municipal + school + county) and the effective tax on a primary residence comes out to roughly 0.5-0.6% of market value. By county on a primary residence: Charleston 0.55-0.70%, Richland (Columbia) 0.65-0.85%, Greenville 0.50-0.65%, Spartanburg 0.55-0.70%, Beaufort (Hilton Head) 0.45-0.60%, Horry (Myrtle Beach) 0.40-0.55%. Among the lowest in the country.

The critical caveat: second homes and investment property are assessed at 6%, which is 1.5x the primary-residence rate. A $400K Hilton Head vacation home pays roughly $3,300/year in property tax versus $2,200 as a primary residence. Out-of-state buyers who plan to use their SC purchase as a second home consistently under-budget for this. Verify your assessment classification with the county auditor on closing.

South Carolina is one of only a handful of states that offers an UNLIMITED state-tax deduction for contributions to its in-state 529 plan (Future Scholar). Most states cap their deduction at modest amounts — Pennsylvania $19K/$38K, New York $5K/$10K, Indiana's program is a 20% credit capped at $1,500 per beneficiary. SC has no annual cap at all. For HNW families funding multiple kids' education, doing 5-year-front-loaded gift-tax-exclusion contributions, or making large lump-sum 529 gifts to grandchildren, the deduction can save thousands of dollars per year.

The math: a $50,000 lump-sum contribution to Future Scholar at SC's 6% top bracket saves $3,000 in SC state tax. A $100,000 5-year-front-loaded contribution (per federal annual gift tax exclusion rules) saves $6,000. There is no other state's 529 program that matches this for high contributors. The wrinkle: only contributions to South Carolina's Future Scholar plan qualify — Utah, Nevada, Vanguard's 529s, and other states' plans don't get the SC deduction.

The retirement-friendly stack is the underrated structural pitch beyond the 529 program. Social Security fully exempt at all income levels. Retirement income deduction $10,000 per filer under 65 / $15,000 per filer 65+ (so a 65+ MFJ couple can exclude $30,000 of pension and qualified retirement income from SC taxable income). Senior Property Tax Homestead Exemption: another $50,000 off fair market value for owner-occupants 65+. The 4% primary-residence assessment ratio applies regardless of age. Combined, a typical SC retiree household drawing $40K Social Security + $40K pension + $20K IRA distribution can pay near-zero SC state tax while owning a meaningful home at very low property tax. This is the structural reason for the steady Northeast-to-SC retirement migration over the past two decades.

Four scenarios that cover most readers. Find the one closest to you. If none match, the calculator at the top is for you.

South Carolina property tax statewide effective average is about 0.55% on primary residences — among the very lowest in the country, well below the national average of 1.10%. The structural reason is SC's 4% assessment ratio for owner-occupied homes: a $400K primary residence is assessed at only $16,000 (4% × $400K), then taxed at the local mill rate (typically 5-6.5% combined). The math: $16,000 × 5.5% = $880/year in property tax. Compare to a state with full-value assessment at the same mill rate: $400K × 1.1% = $4,400/year.

Approximate effective rates on primary residences by county: Charleston 0.55-0.70%, Richland (Columbia) 0.65-0.85%, Greenville 0.50-0.65%, Spartanburg 0.55-0.70%, Beaufort (Hilton Head/Bluffton) 0.45-0.60%, Horry (Myrtle Beach/Conway) 0.40-0.55%, Lexington 0.50-0.65%, Aiken 0.55-0.70%, York (Rock Hill) 0.55-0.70%. Statewide primary-residence average ~0.55%. Beaufort and Horry counties (the major coastal/retirement destinations) are at the low end.

The critical caveat that out-of-state buyers consistently miss: investment property, second homes, and any property that isn't the owner's primary residence is assessed at 6% (vs 4% for primary). A $400K Hilton Head vacation home pays roughly 1.5x what the same home as a primary residence would — about $3,300/year vs $2,200. Many out-of-state retirees who buy in SC while still maintaining a primary residence elsewhere consistently mis-budget for this. To qualify for the 4% rate, you must establish SC primary residency (driver's license, voter registration, vehicle registration, and apply for the residential designation with the county auditor).

No state real estate transfer tax beyond a small county-level recording fee. The OBBBA SALT cap raise to $25K softens the deductibility hit on the annual property tax for high earners — though at SC's low effective rate, most filers don't exceed the cap on property tax alone.

If you're earning $100K+ in SC and you're not doing most of these, you may be leaving real money on the table. None of this is exotic. Most of it is 30 minutes of setup once a year and discipline the rest of the year.

South Carolina is one of the most quietly excellent retirement tax states in the country. The combination of low property tax (4% primary-residence assessment ratio), generous SS + retirement income deduction ($15K/filer 65+), unlimited Future Scholar 529 deduction, and the falling-then-stabilized 6% top rate makes SC competitive with TN, FL, NC, and other Southeast retirement destinations on the tax math while keeping access to the Atlantic coast (Charleston, Hilton Head, Myrtle Beach) and the Blue Ridge foothills (Greenville, Spartanburg). For working professionals, the 6% top rate is appreciably above NC's 3.99% — so the SC pitch is appreciably stronger for retirees than for working-age professionals.

Run your numbers in the calculator above. The SC state line uses the 3-tier bracket schedule (0% / 3% / 6%) with the federal-conforming standard deduction.

If you have kids and want to do significant 529 saving, MAX Future Scholar contributions — the unlimited deduction is rare and valuable, and only SC's plan qualifies. If you're 65+, claim the $15K retirement income deduction per filer and apply for the Senior Property Tax Homestead Exemption with your county auditor.

Verify your property tax assessment is at the 4% primary-residence ratio (not 6%) if you live in the home you own — frequently missed by new buyers and people who shifted a vacation home to primary residency. If you're under-saving in retirement accounts, fix that this month before any other tax move. The biggest tax mistake most South Carolinians make isn't paying too much state tax — it's missing the Future Scholar 529 deduction or being stuck at the 6% non-primary-residence assessment ratio when they're actually a primary resident.