South Carolina Income Tax Calculator
South Carolina has one of the most retiree-friendly tax codes in the Southeast — just three brackets, no local income tax, military retirement fully exempt, and a 44% capital gains exclusion. This take-home pay calculator covers federal tax, all three South Carolina brackets, retirement deductions, and FICA in one place.
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How South Carolina Income Tax Actually Works
South Carolina’s income tax is built on one of the simplest rate schedules in the Southeast: three brackets, identical thresholds for every filing status, and a top rate of 6% that has been steadily falling from a prior high of 7%. The brackets are 0% on the first $3,560 of South Carolina taxable income, 3% from $3,561 to $17,830, and 6% on everything above $17,830 — adjusted each year for inflation. That 6% top rate kicks in at a relatively low dollar threshold, but because South Carolina starts its tax calculation from your federal taxable income rather than your gross income, the federal standard deduction has already worked its way through the math before South Carolina ever touches it. There is no second, separate South Carolina standard deduction for 2025, though that changes with legislation passed in 2026.
Where South Carolina genuinely stands out for retirees and investors is the set of subtractions available after federal taxable income is calculated. Social Security benefits are completely exempt from South Carolina tax, with no income limit or phase-out — one of the cleaner exemptions in the country. Retirement income from 401(k)s, IRAs, and pensions can be deducted up to $3,000 per year for taxpayers under 65, and up to $10,000 once you reach age 65 — and military retirement pay is entirely deductible at any age, with no cap at all. The capital gains treatment is also unusually favorable: South Carolina allows a 44% deduction on net capital gains, meaning only 56% of your gains are actually taxed, bringing the effective rate on long-term gains down to just 3.36% at the top bracket. The dependent exemption adds $4,930 per qualifying dependent, and for families with very young children, each child under age 6 gets an additional $4,930 on top of that — effectively doubling the exemption for the youngest dependents.
Looking ahead to 2026: a major piece of legislation — H. 4216 — changes how South Carolina calculates taxable income starting with the 2026 tax year. It introduces a brand-new South Carolina Income Adjusted Deduction (SCIAD) of $15,000 for single filers and $30,000 for married filing jointly, replacing the current system where South Carolina simply starts from federal taxable income. Returns for 2025 (due October 15, 2026 after the state’s extended filing deadline) are not affected by H. 4216 and still follow the current rules.
Frequently Asked Questions
South Carolina has three tax brackets for 2025: 0% on the first $3,560 of taxable income, 3% from $3,561 to $17,830, and 6% on income above $17,830. The same brackets apply to every filing status. Brackets are adjusted annually for inflation.
Not for 2025. South Carolina starts its income tax calculation from your federal taxable income, which already reflects the federal standard deduction or itemized deductions, so no separate state standard deduction is applied. This changes starting in 2026, when a new South Carolina Income Adjusted Deduction (SCIAD) of $15,000 (single) or $30,000 (married filing jointly) takes effect under H. 4216.
South Carolina allows a retirement income deduction of up to $3,000 per year for taxpayers under age 65, and up to $10,000 per year for those 65 and older. Military retirement pay is fully deductible at any age with no dollar cap.
Partially. South Carolina allows a 44% deduction on net capital gains, meaning only 56% of net capital gains are subject to state tax. At the 6% top rate, this effectively taxes long-term capital gains at about 3.36% — lower than most comparable states.
No. South Carolina fully exempts Social Security benefits from state income tax under S.C. Code Ann. § 12-6-1120, with no income threshold, no phase-out, and no age requirement.
No. South Carolina does not allow any county or municipality to levy a local income tax. The three-bracket state schedule is the entire income-tax picture for South Carolina residents.
Methodology: Calculations use South Carolina’s 2025 three-bracket income tax schedule (0% / 3% / 6%, per South Carolina DOR), applied to federal taxable income with state-specific subtractions (retirement income deduction: $3,000 under 65 / $10,000 age 65+; military retirement: fully exempt; 44% capital gains exclusion; $4,930 dependent exemption per dependent plus an additional $4,930 for dependents under age 6), the 2025 IRS federal tax brackets and Child Tax Credit rules, and 2025 Social Security (6.2% to the $176,100 wage base) and Medicare (1.45% + 0.9% additional Medicare tax) rates, per IRS.gov guidance. South Carolina permits no local income tax. Note: H. 4216 introduces a new SC standard deduction effective with the 2026 tax year; 2025 returns are unaffected. This tool provides estimates for planning purposes only and is not tax, legal, or financial advice. Last reviewed for accuracy: June 2026.