On March 30, 2026, Governor Henry McMaster signed H. 4216 into law. The bill:
Modifies South Carolina’s Individual Income Tax rates:
The tax rate for income less than $30,000 is 1.99%.
The tax rate for income from $30,000 and above is 5.21%, minus $966.
Mandates that the top Individual Income Tax rate will be further reduced if the Board of Economic Advisors (BEA) projects that revenue collections will increase by 5% or greater from the previous fiscal year.
The rate reduction cannot decrease revenue by more than $200 million.
The BEA will make the determination of the new Individual Income Tax rate no later than February 15 of each year.
Decouples South Carolina from federal standard and itemized deductions.
Federal Adjusted Gross Income (AGI) is now the starting point for the South Carolina Individual Income Tax return.
Creates a new South Carolina Income Adjusted Deduction (SCIAD) in place of the federal standard deduction.
$15,000 for taxpayers who file as single or married filing separately
$22,500 for taxpayers who file as head of household
$30,000 for taxpayers who file as married filing jointly or as a surviving spouse
These amounts may be reduced based on income as described in the bill.
Limits South Carolina’s Earned Income Tax Credit (EITC) to $200.
H. 4216 is effective beginning with the 2026 tax year, with returns due April 15, 2027. H. 4216 does not impact 2025 Income Tax returns, which are due October 15, 2026 after the SCDOR granted an automatic filing extension to all taxpayers last month.
The SCDOR will provide guidance as needed later this year through our website and social media channels.
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