Does South Carolina tax Social Security benefits?

No. South Carolina fully exempts Social Security and Railroad Retirement benefits from state income tax, even though they may be partly taxable federally. This tool excludes 100% of the Social Security you enter from your South Carolina taxable income.

What is the South Carolina retirement income deduction?

South Carolina lets taxpayers deduct qualifying retirement income — pensions, IRA, and 401(k) distributions — up to a yearly cap. The cap is larger once you reach age 65, when an additional senior deduction also applies, sharply reducing the tax on retirement income.

How much retirement income can a 65-year-old deduct in South Carolina?

Taxpayers age 65 and older qualify for a larger retirement income deduction plus a general age-65 deduction against all income. Combined, many retirees shelter a substantial share of their pension and 401(k) withdrawals, so only income above those deductions is taxed at the state rate.

What tax rate applies to the remaining retirement income?

South Carolina uses graduated brackets topping out around 6.2% for higher incomes, with lower-income amounts taxed at 0% to 3%. This estimator applies your chosen marginal rate to the income left after the Social Security exclusion and retirement deductions.

Is this an exact tax figure?

No. It is a planning estimate using the headline exclusions, deduction caps, and a single marginal rate. Your actual South Carolina tax depends on filing status, total income, the precise graduated brackets, and other credits, so confirm with a tax professional or the SC Department of Revenue.

South Carolina Retirement Income Tax Calculator

Email me this result

Get this tool's output sent to your inbox, plus one useful tool a week. No spam, unsubscribe any time.

South Carolina is a relatively tax-friendly state for retirees. It fully excludes Social Security from state income tax, offers a retirement income deduction against pensions and 401(k)/IRA withdrawals, and adds a larger senior deduction at age 65. This estimator combines those rules to show roughly what you would owe the state.

How it works

The calculation removes the exempt Social Security, then subtracts the retirement deductions before applying a marginal rate:

taxable retirement = pensions + IRA/401(k) + other taxable income
deductions         = retirement income deduction (+ extra age-65 deduction)
SC taxable         = max(0, taxable retirement − deductions)
estimated SC tax   = SC taxable × marginal rate

Social Security is excluded entirely. Under 65, a smaller retirement income deduction applies; at 65 and older, both a larger retirement deduction and a general age-65 deduction kick in, which is why turning 65 sharply lowers the estimate.

Example and notes

A 67-year-old with 24,000 dollars of Social Security, a 30,000 dollar pension, and 6,000 dollars of other income excludes the Social Security entirely, then subtracts the senior deductions before the remaining amount is taxed at the marginal rate. Because the deductions are generous at 65+, many retirees pay little or no South Carolina tax on modest retirement income. Treat the result as a planning figure — confirm the current deduction caps and graduated brackets with the South Carolina Department of Revenue.