Updated September 4, 2026. Quick answer: Partially, and the same way regardless of source. South Carolina taxes public, private, and federal pensions identically, but shelters a slice of every retiree’s qualified retirement income with a deduction of $3,000 under age 65 or $10,000 at 65 or older, plus an age-65 deduction of up to $15,000 (single) or $30,000 (married, both 65+) against any income, reduced by the retirement deduction already claimed, so the combined total for a person 65 or older is $15,000. Military retirement pay is fully exempt.
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.
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?.
A pension earned in another state, or paid after a move, is covered here: does South Carolina tax out-of-state pensions.
Trusts have their own page: does South Carolina tax trust income.
Dividends and interest have their own page: 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?.
Annuity payments have their own page: 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.
Military retired pay has its own page: does South Carolina tax military retirement.
Selling stocks, funds or real estate has its own page: does South Carolina tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: 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: Intestate Succession in South Carolina.
Related state retirement tax guides: Does South Carolina Tax Social Security? and Colorado to South Carolina Retirement Taxes.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how South Carolina taxes retirement income generally.
Pending, not current law: Senate Bill 207 (2025 to 2026 session) would raise the age-65 deduction to $20,000 (single) or $40,000 (both spouses 65+) with an annual inflation adjustment capped at four percent; only introduced and referred to committee, not passed.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Partially exempt via the general retirement-income deduction below; South Carolina does not distinguish public pensions from private ones. |
|---|---|
| Private (employer) pensions | Partially exempt via the same general retirement-income deduction; identical treatment to public pensions. |
| Federal government pensions (FERS/CSRS) | Partially exempt via the same general retirement-income deduction; identical treatment to public and private pensions. |
| Military retirement pay | Fully exempt since tax year 2022 (Act 156 of 2022), replacing the older capped deduction. |
| IRA and 401(k)/403(b) distributions | Covered by the same general retirement-income deduction as pensions: the statute’s definition of “retirement income” explicitly includes IRC sec. 401, 403, 408 and 457 plans. |
| General retirement-income exclusion | Retirement-income deduction: up to $3,000 (under 65) or $10,000 (65+) per qualifying taxpayer on qualified retirement income; separately, an age-65 deduction against any South Carolina income of up to $15,000 (single) or $30,000 (married, both 65+), reduced by the retirement deduction and any military retirement deduction claimed, so the combined total for a person 65 or older is $15,000. Figures are the most recently published (2025) amounts. |
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Social Security is never taxed by South Carolina. Social Security has its own rules in every state; see the full breakdown in how South Carolina taxes retirement income generally.
Figures verified against the S.C. Code of Laws Title 12 Chapter 6 (sections 12-6-1170 and 12-6-1171), the S.C. Department of Revenue 2025 SC1040 Instructions and the S. 207 bill page on September 30, 2026; no 2026 tax year instructions were available to re-check.
Statute and sources
Governing citation: S.C. Code Ann. sec. 12-6-1170 (general/age-65 deductions), sec. 12-6-1171 (military).
- S.C. Dept. of Revenue, Revenue Ruling #22-11
- S.C. Dept. of Revenue, 2025 SC1040 Instructions
- S.C. Code Ann. Title 12, Chapter 6
Read September 4, 2026.
Related: how South Carolina taxes retirement income generally · does South Carolina tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.