Is South Carolina Tax-Friendly for Retirees? 2026 Guide

How South Carolina taxes retirement income in 2026 (statute-cited)

What settling an estate costs in South Carolina

The verdict

South Carolina vs. its neighbors

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2026 edition · statute-cited · part of Clear Money Guide’s 51-state retirement tax series. This guide covers state taxes on retirement income and estate transfers; property and sales taxes vary by county and are outside its scope.

Updated July 24, 2026. Quick answer: yes — and the details just changed. H.4216 (signed March 30, 2026) is South Carolina’s biggest income-tax overhaul in decades, effective for tax year 2026: 1.99% on income under $30,000 and a 5.21% marginal rate above it, computed against a new federal-AGI base with a new standard deduction ($15,000 single / $30,000 joint, income-limited). Social Security remains fully exempt. If a guide quotes you “0% to 7%” or a 6.4% top rate, it predates the overhaul.

Federal civil service pensions in South Carolina: does South Carolina tax federal pensions.

More on public pension systems, topic by topic: South Carolina PORS purchasing service credit, South Carolina PORS disability retirement and South Carolina PORS return to work on disability.

State retirement-income forms, line by line: South Carolina retirement deduction.

Inherited an IRA? What the state’s own documents say about taxing those withdrawals: South Carolina tax on inherited IRA withdrawals.

Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does South Carolina tax 403(b) and 457(b) withdrawals.

Before the tax question, the police officers retirement system (PORS), with its options and refund rules from its own documents: South Carolina PORS retirement decisions.

Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is South Carolina a community property state?.

Selling your home? How the state taxes the profit, from its own tax documents: Does South Carolina tax the profit from selling your home?.

For a pension earned elsewhere or paid after you move: does South Carolina tax out-of-state pensions.

For trust income specifically: does South Carolina tax trust income.

For dividends and interest specifically: does South Carolina tax dividends and interest.

Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does South Carolina have a gift tax?.

For annuity payments specifically: does South Carolina tax annuity income.

Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does South Carolina have an estate tax?.

Saving for a child’s college? The state’s 529 break has its own page: South Carolina 529 plan tax deduction.

For military retired pay: does South Carolina tax military retirement.

For the sale of stocks, funds or real estate: does South Carolina tax capital gains.

For 401(k) and IRA withdrawals specifically: does South Carolina tax 401(k) and IRA withdrawals.

The state’s income tax schedule: the South Carolina income tax rate for 2026.

More on South Carolina: What Adult Guardianship Costs in South Carolina, How Much Does a Living Trust Cost in South Carolina? and How Much Does a Will Cost in South Carolina?

How South Carolina taxes retirement income in 2026 (statute-cited)

Income tax structure	1.99% under $30,000; 5.21% marginal above (H.4216, eff. TY2026); revenue triggers scheduled to cut the top rate further
Social Security	Not taxed (exemption preserved under H.4216)
Pension / 401(k) / IRA	Taxable after deductions: for the original owner of a qualified retirement account, a retirement-income deduction of up to $3,000/yr, rising to $10,000/yr beginning in the year you reach 65 (S.C. Code §12-6-1170(A)), plus beginning in the year you turn 65 a deduction of up to $15,000 from South Carolina taxable income ($30,000 on a joint return when both spouses are 65), reduced by the retirement deduction claimed under subsection (A), not counting amounts deducted as a surviving spouse, and by any military retirement deduction claimed under §12-6-1171 unless a surviving spouse claims it (§12-6-1170(B) and (C))
Military retirement	Fully deductible at any age (S.C. Code §12-6-1171), including surviving spouses
Estate / inheritance tax	None

Note: H.4216 added the South Carolina Income Adjusted Deduction and a new rate schedule, but it did not amend S.C. Code §12-6-1170 or §12-6-1171, so the retirement and military deductions above are the ones in those sections. SCDOR’s H.4216 notice covers the new rates and deduction and does not discuss the retirement deductions, so check the 2026 forms for how they are reported.

What settling an estate costs in South Carolina

No estate or inheritance tax — but South Carolina is unusual in charging probate court fees on a statutory sliding scale (S.C. Code §8-21-770(B)): from $25 for estates under $5,000 up to $845 plus 0.25% of the excess above $600,000 (a $1M probate estate pays $1,845 in court fees alone). Personal-representative commissions are limited to 5% of the appraised value of the estate’s personal property plus the proceeds of real property sold under the will or a court order, with a $50 minimum, plus up to 5% of the income the estate earns, unless the court approves more for extraordinary services or a contract or the will provides otherwise (S.C. Code §62-3-719); the probate court can review the reasonableness of attorney compensation (S.C. Code §62-3-721). Small estates: if the entire probate estate, wherever located and less liens and encumbrances, does not exceed $45,000, a successor can collect the decedent’s personal property by affidavit thirty days after the death, with the probate judge’s approval and countersignature (S.C. Code §62-3-1201, raised from $25,000 by 2025 Act No. 26, effective May 8, 2025). Context: probate cost by state · small-estate limits by state · will vs. trust calculator.

What the tax picture means for your own accounts

A state guide can set out how the rules treat retirement income in general, but not how they land on your particular mix of pensions, withdrawals and savings, and an adviser can work that through with you.

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The verdict

South Carolina remains genuinely tax-friendly for retirees after H.4216: Social Security untaxed, meaningful deductions at 65+, unlimited military exemption, no tax at death, and a top rate of 5.21% that, starting with tax year 2027, the statute lowers only in years when projected income-tax revenue is set to rise by at least five percent. It is not zero-tax Florida or Tennessee, but for retirees whose income is Social Security plus moderate withdrawals, the effective rate is low — and the probate fee schedule above is the cost most relocation guides never mention.

South Carolina is one of 43 jurisdictions that do not tax Social Security at any income level in 2026. The other 8 exempt benefits only up to an income or age limit. Full rules and statutes: the 51-state table.

South Carolina vs. its neighbors

State	Social Security	Pension / 401(k) / IRA	Estate tax	Inheritance tax
South Carolina	Not taxed	Deductions: $3k under 65; $10k + senior deduction at 65+	None	None
North Carolina	Not taxed	Taxed at flat 3.99% (2026)	None (repealed 2013)	None
Georgia	Not taxed	Excluded up to $65,000/person at 65+ ($35k at 62–64)	None	None
Florida	Not taxed	Not taxed (no income tax)	None	None
Tennessee	Not taxed	Not taxed (no income tax)	None	None

Comparison rows summarize general rules; see our 51-state retirement tax table for statute-cited detail.

Considering a Roth conversion? The converted amount is taxed as ordinary income in the year you convert, and South Carolina may treat it differently from the retirement income above — see how all 51 jurisdictions tax Roth conversions.

Finding a financial advisor in South Carolina

Per the SEC’s July 2026 Investment Adviser roster, South Carolina has 115 SEC-registered advisory firms (#27 nationally) managing $956.0 billion (#21 by AUM). Full breakdown: South Carolina advisor statistics. A cross-state move is exactly when fee structures deserve a second look — see the fee-drag calculator.

Thinking about moving?

Four taxes change when you move state in retirement, not one: income tax on withdrawals, state estate tax, state inheritance tax, and what probate costs your heirs. Corridor comparisons involving South Carolina:

Moving to South Carolina? See retiring to South Carolina.

Compare any two states with the retirement tax comparison tool, or browse all corridors at the relocation hub.

What probate costs in South Carolina

South Carolina uses a hybrid standard — a statutory ceiling or floor with reasonableness applied inside it — so the fee has a bound but not a fixed number. And the small-estate shortcut of $45,000 does not clear a solely owned house on its own, which is the detail most guidance omits. Full detail with the governing statute, the court filing fee and the threshold: South Carolina probate cost. To price a specific estate, use the probate cost calculator.

Cite or share this guide

Suggested citation: Clear Money Guide, “South Carolina Retirement Taxes (2026 edition),” statute-cited; clearmoneyguide.com/south-carolina-retirement-taxes/. Free to cite with attribution and a link. Data verified July 23–24, 2026 against state statutes, session laws, and revenue-department guidance.

Figures verified against SCDOR’s H. 4216 notice, the H. 4216 bill text (Act No. 110), and S.C. Code §§12-6-1170, 12-6-1171, 8-21-770, 62-3-719 and 62-3-1201 on September 30, 2026; the Social Security exemption, the estate and inheritance tax statement, attorney-fee standard, the older-guide rate claims, the North Carolina, Georgia, Florida and Tennessee comparison rows, the SEC advisory-firm statistics and the 51-state counts were not re-checked.

Primary sources

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Is South Carolina Tax-Friendly for Retirees? The 2026 Rules After the Biggest Tax Overhaul in Decades

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