South Carolina — Personal Income Tax

South Carolina imposes an annual income tax on the South Carolina taxable income of individuals, estates, and trusts. For taxable years beginning after 2021, the tax is computed at graduated rates with income brackets indexed for inflation. A "resident individual" is defined as an individual domiciled in South Carolina. Resident individuals compute their South Carolina gross income, adjusted gross income, and taxable income as determined under the Internal Revenue Code, with modifications, subject to allocation and apportionment. Filing requirements depend on gross income thresholds that vary by filing status.

Source: S.C. Code § 12-6-510; S.C. Code § 12-6-560; S.C. Code § 12-6-30

For taxable years beginning after 2025, South Carolina imposes a two-bracket individual income tax structure. The tax rate is 1.99 percent on South Carolina taxable income up to $30,000. For taxable income of $30,000 and above, the rate is 5.21 percent, minus $966 (to account for the lower rate applied to the first $30,000). These brackets are indexed for inflation under § 12-6-520.

Automatic top rate reduction triggers for 2027 and later: Beginning with tax year 2027, the top marginal rate is subject to automatic reductions if certain revenue triggers are met. Specifically, the statute provides that the top rate will be reduced if the Board of Economic Advisors projects that individual income tax revenues (net of Trust Fund credits) will increase by at least five percent in the fiscal year beginning during the tax year, compared to the current fiscal year. The projection used must be the forecast in effect as of February 15 of the current fiscal year; no subsequent revisions to the forecast may affect the determination. Reductions are capped at $200 million or twenty-five percent of the recurring income tax revenue surplus, whichever is greater.

Source: S.C. Code § 12-6-510(C); S.C. Dep't of Revenue, Information about H. 4216

South Carolina individual income tax returns are generally due on or before the fifteenth day of the fourth month following the close of the taxable year. For calendar-year taxpayers, this is typically April 15. The Department of Revenue may grant extensions of time to file, and South Carolina accepts a properly filed federal extension as a state extension request.

Special provision for 2025 returns: For the 2025 tax year (returns filed in 2026), the South Carolina Department of Revenue issued a special administrative order granting an automatic extension for all individual income tax filers. For 2025 returns, the filing deadline is postponed from April 15, 2026 to October 15, 2026. However, at least 90% of any income tax due for 2025 must still be paid by the original April 15, 2026 due date to avoid penalties and interest. This extension is specific to the 2025 return cycle and does not affect other years unless separately announced by the Department.

Source: S.C. Code § 12-6-4970 Source: S.C. Department of Revenue News: 2025 Individual Income Tax Automatic Extension Announcement

For taxable years beginning after 2025, South Carolina allows a South Carolina Income Adjusted Deduction (SCIAD) in place of the federal standard deduction. The base SCIAD amounts are $15,000 for single filers and married filing separately, $22,500 for head of household, and $30,000 for married filing jointly and surviving spouses. These amounts are reduced for higher-income taxpayers. For single and married-filing-separately filers, the deduction is reduced by multiplying $15,000 by the fraction [(federal AGI - $40,000) / $55,000]. For head-of-household filers, the reduction fraction is [(federal AGI - $60,000) / $82,500]. For married-filing-jointly and surviving-spouse filers, the reduction fraction is [(federal AGI - $60,000) / $110,000]. The deduction cannot go below zero.

Source: S.C. Code § 12-6-1140(15), enacted by H. 4216

South Carolina defines a "resident individual" as an individual domiciled in South Carolina. A "nonresident individual" is an individual who is neither a resident nor a part-year resident. A "part-year resident" is an individual who is a resident for only a portion of the tax year. The statute does not define the term "domicile" itself.

Common-law domicile standard

South Carolina courts and the Department of Revenue apply a common-law domicile test. Under the leading case Phillips v. South Carolina Tax Commission, 195 S.C. 472, 12 S.E.2d 13 (1940), domicile for South Carolina income tax purposes means "that place where a person has his true, fixed, and permanent or indefinite home and principal establishment and to which, whenever he is absent, the person intends to return." The South Carolina Supreme Court in Phillips held that "residing" in the income tax statute refers to legal residence, which is equivalent to domicile.

Intent as the central factor

The Department of Revenue's 2021 Domicile Guide emphasizes that determining domicile depends largely on a person's intent. Evidence of intent includes both express statements and conduct. When a person's stated intent and conduct are inconsistent, the person's actions may be more telling as to true intent. However, actions may be less meaningful when the circumstances suggest those actions are easily reversible.

Factors considered

While the statute at S.C. Code § 12-43-220(c)(2)(iv) lists factors to be considered for property-tax legal-residence classification—including South Carolina income tax returns and motor vehicle registrations—the Domicile Guide clarifies that this list is not exhaustive and these factors are not necessarily dispositive for income tax purposes. The true test of domicile is the intent of the putative domiciliary, not any particular set of documents. The lack of certain documents (such as an in-state driver's license) does not necessarily indicate a lack of domiciliary intent.

Administrative Law Court decisions

In Floyd v. S.C. Dep't of Revenue, Dkt. No. 15-ALJ-17-0458-CC (Admin. Law Ct., Feb. 11, 2016), the Administrative Law Court found that a taxpayer who moved to Wyoming after graduating college was domiciled in Wyoming for 2008, even though she listed a South Carolina address on her federal return and retained a South Carolina driver's license. The court credited the taxpayer's testimony about her intent to make the move permanent. In Hodson v. Kiawah Island Assessor, Dkt. No. 01-ALJ-17-0011-CC (Admin. Law Ct., Oct. 27, 2004), the court found that a taxpayer established South Carolina domicile in 1999 when he moved to his Kiawah home with the intent to make it his permanent residence, even though he did not secure certain documentation (such as a South Carolina driver's license) until 2001 due to separation and divorce proceedings.

No statutory 183-day test

Unlike some states, South Carolina does not impose a bright-line 183-day physical-presence test for individual income tax residency in its statute or regulations. Domicile turns on intent and the totality of the circumstances, not a day count.

Source: S.C. Code § 12-6-30; S.C. Dep't of Revenue, A Guide to Determining a Taxpayer's Domicile for Income Tax Purposes (2021)

South Carolina taxes nonresident individuals only on income derived from South Carolina sources. Nonresidents compute their South Carolina taxable income as a resident would, but include only amounts attributable to three categories of South Carolina-source income.

Three categories of South Carolina-source income

Under S.C. Code § 12-6-1720(1), a nonresident individual's South Carolina taxable income includes only amounts attributable to:

1. Real or tangible personal property located in South Carolina — ownership of any interest in real or tangible personal property located in the state. This includes rental income from South Carolina real estate, gains or losses from the sale of South Carolina real property, and income from tangible property situated in the state.

1. Business, trade, profession, or occupation carried on in South Carolina, or compensation for services performed in South Carolina — income from a business conducted in the state or personal services rendered in the state. If a business or services are performed partly within and partly outside South Carolina, the amount allocable or apportionable to South Carolina under Article 17 of Chapter 6 must be included.

1. Income from intangible personal property derived from property employed in a trade, business, profession, or occupation carried on in South Carolina — annuities, dividends, interest, and gains from intangibles that are connected with a South Carolina business activity. Intangible income not connected with a South Carolina trade or business is generally not taxable to nonresidents.

Personal service income allocation: physical presence rule

S.C. Code § 12-6-2220(6) provides that all income from personal services received by a nonresident individual for services rendered in South Carolina is allocated to South Carolina. The statute does not contain a de minimis threshold or a convenience-of-the-employer rule. Personal service income is sourced to the state where the services are physically performed.

The South Carolina Department of Revenue's Revenue Ruling #22-5 confirms that nonresident individuals receiving personal service income from South Carolina must allocate that income to South Carolina based on where services are rendered. A nonresident working remotely for a South Carolina employer from another state does not have South Carolina-source income for those services performed outside the state, because South Carolina follows the general rule that personal service income is sourced to the state in which the work is performed.

Investment income: intangibles not connected with a South Carolina business

Under § 12-6-2220(1), (2), and (5), interest, dividends, and gains from the sale of intangible personal property that are not connected with the taxpayer's business are allocated to the domicile of the individual taxpayer (or the principal place of business of a corporation). Therefore, a nonresident individual who receives portfolio investment income (interest, dividends, capital gains from stocks and bonds) with no connection to a South Carolina trade or business does not owe South Carolina income tax on that income, even if the payer is a South Carolina entity.

Rental and royalty income

Under § 12-6-2220(3), rents and royalties from real estate or tangible personal property are allocated to the state where the property is located at the time the income is derived, provided the property is not used in or connected with the taxpayer's trade or business during the taxable year. A nonresident individual who owns rental property in South Carolina must report the rental income to South Carolina.

Gains and losses from real property

Gains and losses from the sale of real property are allocated to the state in which the real property is located, under § 12-6-2220(4). A nonresident who sells South Carolina real estate must report the gain or loss to South Carolina. The amount of gain representing the return of amounts deducted as depreciation is allocated to South Carolina to the extent the depreciation was previously deducted in computing South Carolina taxable income.

Apportionment when income is partly within and partly outside South Carolina

When a business, trade, profession, or occupation is carried on partly within and partly outside South Carolina, or when services are performed partly within and partly outside the state, § 12-6-1720(1)(b) requires the nonresident to include in South Carolina income the amount "allocable or apportionable to this State under Article 17 of this chapter." Article 17 provides the apportionment formulas and allocation rules for multistate businesses. Personal service income is allocated under § 12-6-2220(6) based on where the services are rendered; non-personal-service business income is apportioned using the statutory formulas in §§ 12-6-2240 through 12-6-2310.

Filing requirement

Nonresidents who have South Carolina-source income are required to file Form SC1040 with Schedule NR attached. Schedule NR computes the ratio of South Carolina-source income to total federal income and prorates deductions accordingly. The Department of Revenue's frequently asked questions confirm that a nonresident individual receiving South Carolina income from wages, rental property, businesses, or other investments in South Carolina must file the SC1040 and Schedule NR.

Source: S.C. Code § 12-6-1720; S.C. Code § 12-6-2220; S.C. Dep't of Revenue, Revenue Ruling #22-5; S.C. Dep't of Revenue, Individual Income Tax FAQs

Beginning with taxable years after 2025 (i.e. for tax year 2026 and beyond), South Carolina no longer adopts the federal standard deduction or itemized deductions. Instead, federal adjusted gross income (AGI) becomes the starting point for the state return, requiring taxpayers effectively to “add back” any federal standard or itemized deductions when computing South Carolina taxable income. In their place, the legislature enacted a South Carolina Income Adjusted Deduction (SCIAD)—the only deduction now available that replaces the federal deductions.

Decoupling from federal deductions: Under amended Section 12‑6‑50 of the South Carolina Code, the portions of the Internal Revenue Code relating to the standard deduction and itemized deduction (Sections 63(b)–(g)) are “specifically not allowed or adopted” by South Carolina for taxable years beginning after 2025. This means individuals must reverse those deductions on their SC return. (Authority: S.C. Code § 12‑6‑50(21) as added by H. 4216)

SCIAD as replacement: Amended Section 12‑6‑1140(15) establishes the SCIAD—a flat amount varying by filing status ($15,000 for single/MFS; $22,500 for HOH; $30,000 for MFJ or surviving spouse), subject to phase‑out based on AGI. No other generic deduction (such as federal) may be claimed in its place. (Authority: S.C. Code § 12‑6‑1140(15)(a)–(b) as added by H. 4216)

Therefore, yes—taxpayers must add back federal standard and itemized deductions, and yes—SCIAD is the only deduction provided by state law in lieu of those federal deductions for taxable years after 2025.

Source: S.C. Code §§ 12‑6‑50(21); 12‑6‑1140(15)(a)–(b) (as added in H. 4216, Act 110 of 2026)

South Carolina’s top marginal individual income tax rate declined steadily from tax year 2022 through tax year 2025, before the revised rate structure under H. 4216 took effect for tax year 2026 and beyond.

Top Marginal Rates by Tax Year:

• 2022: 6.5%
• 2023: 6.4%
• 2024: 6.2%
• 2025: 6.0%

Detailed bracket thresholds (that is, the taxable income ranges at which each rate applies) are updated annually for inflation and published in the South Carolina Department of Revenue’s SC1040 Tax Tables ("SC1040TT"). For full detail on all rate brackets and income thresholds in a given year, see the relevant SC1040 instructions or tax tables for that year.

These rate tiers were in place through tax year 2025; the rate structure changed beginning with tax year 2026 under the provisions of H. 4216.

Source: S.C. Department of Revenue: Individual Income Tax Source: 2022 SC1040 Individual Income Tax Packet

South Carolina provides a state Earned Income Tax Credit (EITC) for full-year resident individual taxpayers, historically calculated as a percentage of the federal EITC. For taxable years beginning after 2025 (i.e., for 2026 returns and onward), H. 4216 (enacted as Act 110 of 2026) amends the statute to set a hard maximum cap of $200 for the state EITC per taxpayer return, regardless of the federal EITC amount. This is a significant change from prior law.

Prior calculation: Before the amendment, S.C. Code § 12-6-3550 allowed eligible taxpayers to claim a South Carolina EITC equal to 125% of the amount they were allowed to claim under the federal EITC (26 U.S.C. § 32), but not exceeding their South Carolina tax liability.

New rule after 2025 (tax year 2026+): For taxable years beginning after 2025, Act 110 of 2026 amends § 12-6-3550 to state that the credit is limited to “the lesser of 125% of the federal credit or two hundred dollars.” In effect, even if 125% of the federal EITC would be higher than $200, the South Carolina credit is capped at $200. This $200 limit applies per taxpayer return, not per qualifying child or federal EITC dollar. The statute contains no provision for income-based phase-out of the state credit beyond the operation of the federal EITC itself—if a taxpayer’s 125% federal-derived amount is less than $200, only the lower amount is allowed; otherwise, the credit is capped at $200.

Summary of calculation:

• Calculate 125% of your federal EITC amount.
• If that number is $200 or less, claim that amount as your state EITC.
• If 125% of your federal EITC is more than $200, claim $200 as your state EITC.

As of June 16, 2026, no further administrative guidance on the filing/form implementation or special procedures has been issued by the Department of Revenue.

Source: S.C. Code § 12‑6‑3550 (as amended by H. 4216, Act 110 of 2026) Source: South Carolina Department of Revenue — Information about H. 4216, 2026 tax changes

Human confirmation status: Not yet human confirmed.

For real estate closings occurring in tax year 2026 and later, South Carolina requires withholding on the sale of South Carolina real property by nonresident individuals, partnerships, estates, and trusts at a rate of 5.21 percent. This reflects a decrease from the prior 6.0 percent rate in effect for 2025, following the enactment of Act 110 of 2026 (H. 4216), which restructured the state’s income tax and reduced the top marginal individual income tax rate.

Statutory mechanism and operation: S.C. Code § 12-8-580(A)(1) requires the buyer, or their closing agent, to withhold “a percentage equal to the maximum individual tax rate” from the gain recognized by nonresident sellers on the sale of South Carolina real property. For tax year 2026 and thereafter, the top marginal individual income tax rate is 5.21% per S.C. Code § 12-6-510, as amended by Act 110 (H. 4216, effective for tax years beginning after 2025). Therefore, the nonresident withholding rate on real estate transactions automatically adjusts to 5.21% for closings in 2026 and later. No legislative changes have modified this provision since Act 110.

Procedural notes:

• The 5.21% withholding rate generally applies to the net gain if the seller properly furnishes an affidavit of gain at closing; otherwise, it applies to the amount realized (gross sales price).
• The amount withheld is credited against the seller’s final South Carolina income tax liability for the gain reported on the sale.
• Department of Revenue forms and instructions may be updated for procedural implementation, but the statutory basis for the rate is determined by § 12-8-580 and will track the top income tax rate each year.

Exception: The withholding rate for nonresident corporations is governed by a separate statutory formula under § 12-8-580(A)(2) and is not tied to the individual top marginal rate.

Summary of change: For closings in tax year 2026 and thereafter, the nonresident real property withholding rate is 5.21%, reduced from 6.0% in 2025, based on the revised income tax structure under Act 110 (H. 4216).

Source: S.C. Code § 12-8-580 Source: S.C. Code § 12-6-510, as amended by Act 110 (H. 4216, 2026) Source: South Carolina Department of Revenue — Information about H. 4216, 2026 tax changes

Not yet human confirmed. If the Department of Revenue issues further guidance or clarifies a transitional matter (such as effective date for property under contract before 2026 but closed after), an additional update may be required.

Unable to confirm as of 2026-06-24.

Source: H. 4216, South Carolina General Assembly, section amending S.C. Code § 12-6-4910

For taxable years beginning after 2025, South Carolina no longer allows any additional deduction for age (65 or older) or blindness, nor does it permit federal-style itemized deductions on the state return. The South Carolina Income Adjusted Deduction (SCIAD)—established by Act 110 of 2026 (H. 4216)—is the exclusive, replacement deduction in lieu of both the federal standard deduction and itemized deductions.

No additional deduction for age or blindness Under prior law, the South Carolina return followed federal precedent by allowing a higher filing threshold for those age 65 and over (by piggybacking on the federal standard deduction structure). However, effective for tax years beginning after 2025, S.C. Code § 12-6-50(21), as amended by H. 4216, explicitly provides that the Internal Revenue Code sections establishing the federal standard deduction and additional deductions for age or blindness (26 U.S.C. § 63(c)(3) and § 63(f)) "are specifically not allowed or adopted." The only deduction available at the return level is the SCIAD, which does not provide an extra amount for age or blindness. There is no provision granting a separate/additional deduction for age or blindness in the relevant statutes for tax years 2026 and beyond.

SCIAD is exclusive—itemized deductions not allowed Section 12‑6‑50(21) and Section 12‑6‑1140(15) (as enacted by H. 4216) make clear that after 2025, the SCIAD is the sole deduction allowed at the return level for individuals. References to federal itemized deductions (26 U.S.C. § 63(d)) are explicitly decoupled. Taxpayers are required to "add back" any federal itemized amounts when recomputing state income, and may not substitute state-specific itemized deductions in their place. Only the SCIAD (subject to AGI-based phase-out) is permitted for all filers.

Summary: For South Carolina taxable years beginning after 2025, there is no additional standard deduction for age 65+ or blindness. Itemized deductions are not allowed. The SCIAD is the only individual-level return deduction available under law.

Source: S.C. Code § 12-6-50(21) (as amended by H. 4216, Act 110 of 2026) Source: S.C. Code § 12-6-1140(15)

An individual who is a part-year resident of South Carolina must compute and allocate income, deductions, and credits using one of two statutorily authorized methods:

Choice of Method (S.C. Code § 12-6-1710):

• Resident-method: File as a full-year South Carolina resident using Form SC1040, reporting all income for the year. A credit is allowed for income tax paid to another state via SC1040TC under § 12-6-3400.
• Nonresident-method: File as a nonresident under § 12-6-1720, reporting only income earned while a resident AND South Carolina-source income. Deductions and exemptions—including the standard deduction (SCIAD) and personal exemptions—are prorated based on the ratio of South Carolina adjusted gross income to federal adjusted gross income.

Practical Calculation Details (§ 12-6-1720):

• Income included when using the nonresident method consists of (a) income earned while a resident (included in the same manner as for a full-year resident under § 12-6-560), plus (b) South Carolina-source income earned while a nonresident (compensation for services performed in-state, business income apportionable to SC, SC real estate income, etc.).
• Deductions and exemptions must be reduced proportionally. For example, if South Carolina AGI is 60% of federal AGI, then the standard deduction and personal exemption allowed is 60% of the federal amount.

Allocation and Apportionment rules (Article 17, § 12-6-2220):

• Personal service income: For part-year residents, any compensation received while a resident is treated as resident income. Compensation for services performed in South Carolina by a nonresident is allocated to South Carolina. If services are performed both inside and outside South Carolina, only the portion earned for South Carolina work is included/apportioned.
• Other income types (interest, dividends, rents, gains) are allocated based on situs or business connection per § 12-6-2220. Business income may be apportioned under §§ 12-6-2230 and 12-6-2240 if applicable.

Summary Table: | Method | Income Included | Deductions/Exemptions | Credits | |-------------------|----------------------------------------------|-------------------------------|------------------------------------------| | Resident-method | All income for the year | Full deductions/exemptions | Credit for taxes paid to other state | | Nonresident-method| Income while resident + SC-source income | Prorated (by income ratio) | None (applies indirectly via proration) |

Source: S.C. Code § 12-6-1710; S.C. Code § 12-6-1720; S.C. Code § 12-6-2220; S.C. Dep't of Revenue, Individual Income Tax FAQ

Not yet human confirmed. DOR publications support the main interpretation, but further practitioner confirmation is recommended, particularly regarding proration mechanics and filing form details as implemented in the latest SC1040 instructions.