You've worked hard in life and are finally looking forward to retirement. Almost 19% of South Carolinians are age 65 or older, according to the
So what benefits could South Carolina retirees take advantage of when filing state taxes? The South Carolina Department of Revenue (SCDOR) offers these tax tips for the state's older citizens:
Individual Income Tax deductions:
Other retirement income deduction: An individual taxpayer receiving retirement income from their own plan may deduct up to $3,000 of qualifying retirement income annually until reaching age 65. After reaching age 65, they may deduct up to $10,000 of such retirement income annually.
Deduction for those 65 and older: Resident individuals who are 65 or older by the end of the tax year are allowed an Income Tax deduction of up to $15,000 against any South Carolina taxable income. Amounts deducted as retirement income reduce this $15,000 deduction. Amounts deducted as a surviving spouse do not reduce this $15,000 deduction.
Military Retirement Deduction: For the 2021 tax year, 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. For the 2021 tax year, eligible military retirees of any age with both earned income and military retirement income may deduct up to $17,500 of earned income.
Social Security income:
Social Security benefits and railroad retirement taxed for federal purposes are not subject to tax in South Carolina.
Many forms of investment income, including traditional IRAs, 401 (k), 403 (b), and many pension distributions, are taxable at the federal level and are at the South Carolina level as well.
Some interest payments, including interest income from US obligations (such as US savings bonds, treasury notes and bills, etc.) and interest income from South Carolina obligations, are not taxable in South Carolina.
Sales Tax reduction:
Individuals 85 years of age and older are allowed a 1% lower state tax rate for purchases for their personal use under South Carolina Sales and Use Tax law.
The lower Sales and Use Tax rate, sometimes referred to as the “1% exclusion" or “1% reduction," does not apply to local taxes administered and collected by the SCDOR on behalf of local jurisdictions or to local Sales Tax administered and collected directly by a city or county.
Property Tax reduction:
If you have resided in South Carolina as your permanent home and legal residence for a full calendar year (January 1-December 31) and you are 65 years or older, legally blind, or permanently and totally disabled, you are eligible for a Homestead Exemption of $50,000 from the value of your home for tax purposes.
The application for exemption must be made to the auditor in the county where the dwelling is located.
See more information about the Sales Tax reduction in
Revenue Ruling 16-9. For more information about South Carolina Individual Income Tax, visit
dor.sc.gov/iit. To learn more about the Homestead Exemption, visit
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