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South Carolina · the numbers
South Carolina figures at a glance, 2026
Every South Carolina number for the 2026 return in one place: the two rates and the bracket line, the new income adjusted deduction and where it phases out, the dependent exemption, the retirement and capital gain deductions, the credits, the filing thresholds, the estimated-payment rules and the dates. With a short list of what changed from 2025. For anyone who files here, and for anyone checking a preparer’s work.
By Charles Trautman, EA, editor
Need to Know Tax · written from South Carolina Department of Revenue (SCDOR) sources, November 3, 2026; updated November 12, 2026 after the election · not yet reviewed by a South Carolina practitioner
Almost every number on this page is new, because Act 110 of 2026 rewrote the South Carolina return for tax year 2026. The rates are 1.99% on the first $30,000 of taxable income and 5.21% above; the starting point is federal adjusted gross income; the federal standard and itemized deductions are replaced by the South Carolina Income Adjusted Deduction of $15,000, $22,500 or $30,000, which phases out with AGI; and the state earned income credit is capped at $200. What did not change: Social Security untaxed, the retirement and age-65 deductions, and the 44% deduction for long-term capital gains.
Rates and the starting point
| Item | 2025 | 2026 |
|---|---|---|
| Starting point, SC1040 line 1 | Federal taxable income | Federal AGI |
| Brackets | 0%, 3%, 6% | 1.99%, 5.21% |
| Lower bracket | 0%, then 3%, on indexed brackets (2025 SC1040TT) | 1.99% on taxable income under $30,000 |
| Upper bracket | 6% top rate | 5.21% on $30,000 and above, figured as 5.21% × taxable income − $966 |
| Bracket indexing | Annual | Annual, chained CPI, from 2027 |
| Federal standard or itemized deduction | Carried over | Not allowed |
| Federal QBI, tip, overtime, senior, car-loan deductions | Added back (IL 26-4) | Never reach the return |
| Local income tax | None | None |
The 2026 SC1040ES, printed before Act 110, shows the old three-bracket schedule indexed to $3,640 and $18,230. Those figures no longer apply to 2026.
| South Carolina taxable income | Tax | Effective rate |
|---|---|---|
| $10,000 | $199 | 1.99% |
| $30,000 | $597 | 1.99% |
| $50,000 | $1,639 | 3.28% |
| $75,000 | $2,942 | 3.92% |
| $100,000 | $4,244 | 4.24% |
| $200,000 | $9,454 | 4.73% |
Taxable income here is after the SCIAD, the dependent exemption and the state subtractions. The Department will publish an SC1040TT table for 2026; until then the two formulas are the law.
The South Carolina Income Adjusted Deduction
| Federal AGI | Single or MFS | Head of household | Joint or surviving spouse |
|---|---|---|---|
| $40,000 or less | $15,000 | $22,500 | $30,000 |
| $50,000 | $12,280 | $22,500 | $30,000 |
| $67,500 | $7,500 | $20,460 | $30,000 |
| $80,000 | $4,100 | $17,050 | $30,000 |
| $100,000 | $0 | $11,600 | $24,550 |
| $135,000 | $0 | $2,050 | $15,000 |
| $160,000 | $0 | $0 | $8,190 |
| $190,000 or more | $0 | $0 | $0 |
Formula: the full deduction reduced by its own amount times (AGI minus the floor) over the width of the range; floors are $40,000 / $60,000 / $80,000 and widths $55,000 / $82,500 / $110,000. A reduction that is not a multiple of $10 is rounded down to the next $10. Nonresidents and part-year residents prorate by South Carolina AGI over federal AGI. The Department has said a calculator will be on MyDORWAY.
Exemptions and subtractions
| Item | 2025 | 2026 |
|---|---|---|
| Personal exemption, taxpayer and spouse | None | None |
| Dependent exemption, per federal dependent | $4,930 | To come (indexed) |
| Additional exemption, each dependent under age 6 at year end | $4,930 | To come (indexed) |
| Social Security and Railroad Retirement, taxable portion | 100% | 100% |
| Retirement income deduction, per person, under 65 | $3,000 | $3,000 |
| Retirement income deduction, per person, 65 or older | $10,000 | $10,000 |
| Age 65 and older deduction, per person, any income | $15,000, less retirement deductions taken | $15,000, less retirement deductions taken |
| Military retirement | 100%, any age | 100%, any age |
| Net long-term capital gain | 44% | 44% |
| Future Scholar 529 contributions, through April 15 of the next year | 100%, no state cap | 100%, no state cap |
| Active trade or business income (Form I-335), optional flat rate | 3% | 3% |
| Interest on U.S. obligations | 100% | 100% |
| Mortgage interest, property tax, charitable gifts, medical, gambling losses | Through federal Schedule A | None |
The age-65 deduction is reduced by the retirement and military retirement deductions already taken, so the most a person 65 or older shelters under the two together is $15,000, not $25,000. The 44% capital gain deduction makes the effective top rate on a long-term gain 2.92%.
The credits
| Credit | Figure | Refundable? | Notes |
|---|---|---|---|
| Earned income credit | 125% of the federal EITC, capped at $200 per return | No | Full-year residents only; cap is new for 2026 |
| Two wage earner credit | 0.7% of the lower-earning spouse’s earned income up to $50,000; maximum $350 | No | Joint returns only |
| Child and dependent care credit | 7% of federal qualifying expenses; maximum $210 for one child, $420 for two or more | No | Not for married filing separately |
| Tuition credit (Form I-319) | 50% of tuition at a South Carolina college, up to $1,500 a year, four years | Yes | 30 credit hours in the year; South Carolina high school graduate; no LIFE or Palmetto Fellows |
| Credit for tax paid to another state | Lesser of the other state’s tax or South Carolina tax on the same income | No | No reciprocity with any state |
| Nursing facility, in-home or community care credit | 20% of expenses, up to $300 | No | SC1040TC |
| State child tax credit | None | The dependent exemption carries the load |
Who must file
| Household | File if over |
|---|---|
| Single or MFS, under 65 | $15,000 |
| Head of household, under 65 | $22,500 |
| Joint, both under 65 | $30,000 |
| Single or MFS, 65 or older | $30,000 |
| Head of household, 65 or older | $37,500 |
| Joint, one spouse 65 or older | $45,000 |
| Joint, both 65 or older | $60,000 |
New for 2026 under Act 110. Through 2025 the rule was simply that a resident who had to file federally had to file in South Carolina.
Payments and dates
| Item | 2026 return |
|---|---|
| Estimated payments required when expected tax after withholding is | $100 or more |
| Safe harbor | 100% of 2025 tax (110% if 2025 AGI over $150,000), or 90% of 2026 tax, in four equal installments |
| 2026 estimated payment dates | April 15, June 15, September 15, 2026; January 15, 2027 |
| Farmers and fishermen (two-thirds of gross income) | One payment by January 15, 2027, or file and pay by March 1, 2027 |
| Return and payment due | April 15, 2027 |
| Extension | Six months to October 15, 2027; SC4868 or a MyDORWAY payment; federal extension accepted only if no state tax is due |
| Late-payment penalty under extension | 0.5% a month if less than 90% paid by April 15, plus interest at federal rates |
| Must file and pay electronically | Anyone owing $15,000 or more on a return |
| Refund timing, e-filed | Up to 8 weeks from February 2 or the filing date, whichever is later (2026 season statement; 2027 to come) |
| Withholding form | SC W-4; 2026 tables issued November 6, 2025, before Act 110 (verify whether revised) |
Beyond the income tax
| Item | 2026 |
|---|---|
| Estate, inheritance or gift tax | None |
| Homestead exemption, owners 65 or older, totally and permanently disabled, or legally blind | First $50,000 of fair market value exempt from all property tax; apply once at the county auditor; one full calendar year of residency |
| State sales tax | 6%, plus local option taxes of up to 3 points; unprepared food exempt from the state rate |
| Reciprocal states for wages | None |
Worked example: what a dollar of income costs in the SCIAD phase-out
A married couple with federal AGI of $120,000 considers a $10,000 Roth conversion in 2026. The conversion raises AGI to $130,000 and also shrinks the SCIAD.
| AGI $120,000 | AGI $130,000 | |
|---|---|---|
| SCIAD: $30,000 × (AGI − $80,000) ÷ $110,000, rounded down to $10, subtracted from $30,000 | $19,100 | $16,370 |
| Taxable income (no other subtractions) | $100,900 | $113,630 |
| Tax: 5.21% × taxable income − $966 | $4,291 | $4,954 |
| Extra South Carolina tax on $10,000 more income | $663, a 6.63% marginal rate |
The nominal rate is 5.21%, but each extra dollar of AGI in the phase-out range also removes about 27 cents of SCIAD, and that 27 cents is taxed at 5.21%, adding 1.42 points. The ratio is the same for every filing status, so the marginal rate inside any SCIAD phase-out is about 6.63%. Below the floor and above the ceiling it is 5.21%.
What changed from 2025
- Starting point moved from federal taxable income to federal AGI.
- Three brackets (0%, 3%, 6%) became two (1.99%, 5.21%); the 0% bracket is gone.
- Federal standard, itemized, QBI, tip, overtime, senior and car-loan deductions no longer reach the return; the SCIAD replaces the first two.
- State EITC capped at $200. Filing thresholds now keyed to the SCIAD and age. Nonresidents prorate the SCIAD and dependent exemption.
- Unchanged: Social Security, retirement and age-65 deductions, military retirement, the 44% capital gain deduction, the Future Scholar deduction, the 3% active trade or business rate, the dependent exemption (2026 figure to come), the credits, the homestead exemption.
- To come: the 2026 dependent exemption, the SC1040TT, the redesigned SC1040, revised withholding tables, and the Board of Economic Advisors’ February 15, 2027 decision on a 2027 rate cut.
Behind the scenes: why every phase-out has the same slope
The three SCIAD ranges look unrelated, $55,000 wide for a single filer, $82,500 for head of household, $110,000 for a couple, but each is 3.67 times the full deduction, so the deduction falls at the same 27.3 cents per dollar of AGI for everyone. The effect is a hidden surtax of about 1.42 points on top of 5.21% inside each range, and it is part of why the Revenue and Fiscal Affairs Office found that some middle-income filers pay more under Act 110 while most pay less.
What to bring
- Last year’s SC1040, for the safe-harbor figure and a line-by-line comparison
- Dates of birth for everyone on the return
- Form 1099-R and SSA-1099 for every pension, IRA and Social Security payment
- Brokerage 1099-B with long-term and short-term gains separated, for the 44% deduction
- Future Scholar contribution statements, including any made January 1 to April 15, 2027
Questions people ask
What are the South Carolina tax rates for 2026?
1.99% on the first $30,000 of South Carolina taxable income and 5.21% above that. The upper bracket is figured as 5.21% of taxable income minus $966. There is no 0% bracket anymore.
What is the standard deduction in South Carolina?
There is none in the federal sense. The South Carolina Income Adjusted Deduction is $15,000 single, $22,500 head of household and $30,000 joint, and it phases out on federal AGI between $40,000 and $95,000, $60,000 and $142,500, and $80,000 and $190,000 respectively.
What is the dependent exemption for 2026?
The 2025 figure was $4,930 per dependent, doubled for a dependent under age 6. The exemption is indexed and the 2026 figure had not been published when this was written. Act 110 kept the exemption.
How much of a capital gain does South Carolina tax?
56% of a net long-term gain, after the 44% deduction. At the 5.21% rate that is an effective 2.92%. Short-term gains are taxed in full.
Two rates, one deduction that shrinks, and a bracket line of $30,000
Know your federal AGI and where it sits against $40,000, $60,000 or $80,000, and most of the 2026 South Carolina return follows.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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Forms and official pages named in this article
- Information Letter 26-20, Individual Income Tax Reform (Act 110 of 2026)
- SC1040 Instructions (2025 return), with the retirement, age-65, capital gain, 529 and dependent lines
- SC1040ES 2026, estimated tax worksheet and vouchers
- SC4868, Request for Extension of Time to File
- 2026 withholding tables and SC W-4