With Veterans Day approaching, the South Carolina Department of Revenue (SCDOR) thanks our veterans and military personnel for their service and reminds them of available tax benefits.
1. Income Taxes
The SCDOR recently released Revenue Ruling 21-13, which provides guidance on Income Tax deductions for military retirees, including:
- Military Retirement Income Deduction for Age 65 and Older Military Retirees in South Carolina: Qualifying military retirees age 65 and older with taxable military retirement income may deduct up to $30,000 of military retirement income included in South Carolina taxable income each year.
- Earned Income Deduction for Military Retirees in South Carolina: Eligible military retirees of any age with both earned income and military retirement income may deduct up to $17,500 of earned income each year.
Additional details and examples related to these deductions and other general retirement and age-65 Income Tax deductions are found in Revenue Ruling 21-13.
Additionally, veterans in South Carolina may be eligible for the following:
- Income Tax Exclusions in South Carolina:
- Any federal tax-exempt pension or compensation provided by the U.S. Department of Veterans Affairs
- Combat pay and certain benefits not included in federal taxable income
- Retirement income paid by the U.S. government for service in the Reserves or National Guard
- Income received for service in the National Guard or the Reserves for customary annual training, weekend drills, and other inactive duty training is generally exempt
- Service pay for non-resident military personnel on active duty in South Carolina who are legal residents of other states
2. Property Taxes
- Veterans deemed totally and permanently service-connected disabled qualify for:
- A tax exemption on a home and land on the same parcel, up to five acres, that is classified as owner occupied and either titled solely to the veteran or jointly with a spouse
- A tax exemption on up to two private passenger vehicles owned or leased by a veteran or jointly with a spouse
- Medal of Honor recipients qualify for:
- A tax exemption on a home and land up to one acre that is either titled solely to the recipient or jointly with a spouse
- A tax exemption on up to two vehicles owned or leased by the recipient
- Former prisoners of war (POW) from WWI, WWII, the Korean War or Vietnam War qualify for:
- The same tax exemptions granted to Medal of Honor recipients for home and land up to one acre that is classified as owner occupied and either titled solely to the former POW or jointly with a spouse
- A tax exemption on up to two private passenger vehicles owned or leased by the former POW or jointly with a spouse
- Surviving spouses for all three types of veterans listed above qualify for tax exemptions on the home if they inherit sole ownership from the deceased spouse. The surviving spouses of POWs and disabled veterans can qualify for exemptions on up to one vehicle solely owned by them.
Visit dor.sc.gov/exempt-property to learn how to apply for property tax exemptions and for detailed information on other exemptions for veterans.
3. Other taxes
- Check with your local government to learn more about specific tax benefits for veterans in your area.
- Military personnel in a combat zone have 180 days after leaving the combat zone to file their state and federal Income Tax returns. They also can wait until they are out of the combat zone to pay.
- When filing by paper or online, military members should indicate that they served in a military combat zone and name the zone.
For more information, visit the SCDOR's website at dor.sc.gov. Connect with the SCDOR on Facebook and Twitter for up-to-date news and announcements.