Individuals are allowed a deduction from South Carolina taxable income equal to 44% of the net capital gain recognized in South Carolina. "Net capital gain" means the excess of the net long-term capital gain from the sale or exchange of a capital asset held for more than one year over the net short-term capital loss of capital assets held for one year or less. South Carolina capital gains holding period is the same as the federal holding period.

Refer to the SC1040 instructions for more information.

Individuals are allowed a 44% deduction for recognized net capital gains that have a holding period of more than one year. The holding period for investments in a mutual fund is the time the mutual fund held the investment; it is not how long the individual taxpayer held their shares in the mutual fund. Information should be provided by the mutual fund provider.

Interest income from US obligations (such as US savings bonds, treasury notes and bills, etc.) and interest income from South Carolina obligations is not taxable in South Carolina.

See SC Revenue Ruling #91-15 for a detailed listing.

South Carolina provides deductions for contributions to the South Carolina Tuition Prepayment Program and to the South Carolina College Investment Program ("Future Scholar"). South Carolina does not provide a deduction for contributions to IRC Section 529 plans in general.

You can deduct amounts contributed to the plans in the year of the contribution.  Contributions made to the Future Scholar program by April 15 can be deducted for either the current or the previous tax year.

See Code Sections 12-6-1140(11), 59-2-80(D), 59-4-100.

If amounts are withdrawn from the 529 plan and not used for qualifying purposes, the earnings portion of the withdrawal is included in the gross income of the recipient.  The principal amount of the contributions must be recaptured and included in South Carolina taxable income if they were previously deducted and are not withdrawn for qualifying purposes.  

See Code Section 59-2-80(C).

A qualified withdrawal is a withdrawal by an account owner or beneficiary for qualified higher education expenses or as otherwise permitted under Section 529 of the Internal Revenue Code of 1986, as amended, without a penalty required by the section.

See Code Section 59-2-30(12).

South Carolina provides individual taxpayers with a deduction (not a credit) for adopting a special needs child. The deduction is $2,000 for each adopted special needs child who is under 18 at the time of adoption. A letter from the South Carolina Department of Social Services must be attached to the tax return certifying the child as a “special needs child.”

See Code Section 12-6-1140(7).

The deceased taxpayer's return should include any deductions they were eligible to take based on income earned while they were alive. A surviving spouse may also be able to take additional deductions for income they receive. 

• A surviving spouse receiving qualified retirement income on behalf of a deceased spouse may deduct up to $3,000 or $10,000 of the qualified retirement income, based on the age of the deceased spouse if they were alive. The surviving spouse must receive the decedent's retirement income as a surviving spouse. This is in addition to the surviving spouse's own retirement plan deduction. 
  
• Taxpayers can deduct all military retirement income included in their South Carolina taxable income. Military retirement income means taxable income received by the taxpayer or the taxpayer's surviving spouse from a qualified military retirement plan. For a surviving spouse, military retirement income includes a retirement benefit plan and dependent indemnity compensation received due to the deceased spouse's military service. The surviving spouse military retirement deduction is in addition to any retirement deductions claimed on the taxpayer's own retirement income. 

File an SC 1310 to claim a refund on the deceased taxpayer's return. Follow the instructions on the SC1310 to determine if you need to send a copy of the death certificate or the court certificate showing your appointment as a representative.
Refer to SC1040 instructions and SC Revenue Ruling #22-11 for detailed information and examples.

If you owe $15,000 or more in connection with any SCDOR return, you must file and pay electronically according to SC Code Sections 12-54-250 and 12-54-210.

Yes, the SCDOR will send an Electronic Mandate Notice.

Yes.

Yes. Penalty and interest will be applied as permitted by law. A penalty of $500 per period will be assessed until you start filing and paying electronically.

See Code Section 12-6-4980.

The composite return may be extended by filing the SC4868. Any tax estimated to be due must be paid with the timely filed extension. A composite return cannot be extended by filing the SC1120T or federal Form 7004. Likewise, the extension of the composite return does not extend the South Carolina S Corporation (SC1120S) or partnership (SC1065) tax return.

Request your extension to file by paying your balance due on our free tax portal, MyDORWAY, at dor.sc.gov/pay. Select Individual Income Tax Payment to get started. Your payment on MyDORWAY automatically submits your filing extension request. No additional form or paperwork is required. If filing the SC4868 by paper, mark the Composite Filer box and mail the original with payment, if any.

Check the Extension box on the front of your SC1040 to indicate that you filed an extension. 

See also SC Revenue Procedure #17-2.

South Carolina residents should file an SC1040. A part-year resident or nonresident of South Carolina should file an SC1040 with a completed Schedule NR (Nonresident Schedule) attached.

You can file your South Carolina tax return using one of the following methods:

• Electronic filing using a professional tax preparer
• ​Online filing using available commercial ​software
• SCDOR website using participating vendors
• Paper return

You are a South Carolina resident, even if you live outside South Carolina, when:

1. Y​our intention is to maintain South Carolina as your permanent home; AND
2. South Carolina is the center of your financial, social, and family life; AND
3. When you are away, South Carolina is the place to which you intend to return.

See Code Sections 12-6-1720 and 12-6-2220.​

See Code Section 12-6-2220.​

See Code Sections 12-6-2220(6), 12-6-3400.

If you file married filing jointly for federal purposes, you will also file married filing jointly for South Carolina purposes. If one taxpayer is a resident of South Carolina and one is not, file the SC1040 with the accompanying Schedule NR. Column A of the Schedule NR is the income from your federal return and Column B of the Schedule NR includes only the income earned while a resident of South Carolina or income earned from South Carolina sources.

If you enter the armed forces when you are a South Carolina resident, you do not lose your South Carolina residency status, even if you are absent from the state on military orders. You are subject to the same residency requirements as any other South Carolina resident and are required to file a South Carolina Income Tax return. Use the same filing status for South Carolina as you used on your federal return.

Usually, if a spouse survives, that person files the return. The filer could also be an executor, administrator, or representative named in the person's will or appointed by a judge. If none of those exists, a personal representative will file the return. Please note:

• The final return is due by the regular April deadline for Individual Income Tax returns unless the surviving spouse or representative files for an extension.​​
• When filing the return, check the box for “deceased" next to the appropriate Social Security number. If filing by paper, this box is located at the top of the SC1040.
• For more filing information, see our FAQ, What filing status should a surviving spouse choose when filing?

Signing the return 
When filing a return for a deceased taxpayer: 

• If an appointed representative is filing the return, they must sign it. On joint returns, the surviving spouse also must sign. 
• If there isn't an appointed representative, the surviving spouse filing a joint return should sign and write “filing as surviving spouse" beside their signature. 
• If there's no appointed representative and no surviving spouse, the person in charge of the deceased taxpayer's property should file and sign as a personal representative. 
• When filing electronically, follow the software provider's instructions on signing.
  

Because the South Carolina return starts with what was filed with the IRS, it's important to choose the appropriate filing status and keep that status on the South Carolina return. 

A surviving spouse who does not remarry during the year typically has two options for filing status in the year their spouse passes away: 

• Married filing jointly. This filing status offers a higher standard deduction and usually results in a lower Income Tax calculation. It is the most common status used by a couple. 
• Married filing separately. A surviving spouse may choose this status if they want to avoid taking responsibility for their deceased spouse's tax liabilities or if the total tax would be lower by filing separately. 

In years after the spouse passes away, a surviving spouse who has not remarried typically has three options for filing status: 

• Single. A surviving spouse who does not remarry and does not have any dependents will likely use this filing status. 
• Head of Household. This filing status is for those who are unmarried, or considered unmarried, at the end of the tax year, paid more than half the cost of keeping up a home, and had a qualifying person, such as a dependent, living with them for more than half the year. This filing status offers a higher standard deduction than the Single filing status. 
• Qualifying Surviving Spouse. This filing status, previously known as Qualifying Widow or Widower, is available for a surviving spouse who still has a qualifying dependent child, stepchild, or adopted child living in their home. To qualify, the surviving spouse must have been entitled to file a joint return in the year the spouse died and must pay more than half the cost of keeping up their home. This filing status is only available for two years after the year the spouse passes away.

See SC Revenue Ruling 16-2 for a detailed listing.

Yes. South Carolina recognizes Internal Revenue Code Section 1031. No South Carolina adjustment is necessary.

Pension income received while a resident of South Carolina is taxable to South Carolina. However, we do allow a total and permanent disability retirement income deduction. If disability retirement income is taxed on your federal return and you are totally and permanently disabled, you may be able to deduct this income from your South Carolina taxable income.

To qualify, you must be totally and permanently disabled, unable to be substantially gainfully employed, receiving income from a disability retirement plan, and eligible for the homestead exemption under Section 12-37-250. You must attach a copy of the physician's statement establishing that you are permanently and totally disabled.

See Code Sections 12-6-1140(4), 12-37-250.

Unemployment compensation, taxed on your federal return, is taxable to South Carolina if it was paid by South Carolina or received while a resident of South Carolina.

No. South Carolina does not tax compensation received for the customary annual training period up to 15 days for guard members or 14 days plus travel time for reserve members, weekend drills, and inactive duty training.

See Code Section 12-6-1120(7), SC Revenue Ruling #09-16.

Yes, for tax years beginning on or after January 1, 2009. See SC Revenue Ruling #10-5 for more information for tax years 2009 through 2017.

Beginning in tax year 2018, the spouse of a military servicemember can choose to use the same residence as the servicemember for tax purposes, regardless of when they were married.  

No. South Carolina does not tax compensation received for the customary annual training period up to 15 days for guard members or 14 days plus travel time for reserve members, weekend drills, and inactive duty training.

See Code Section 12-6-1120(7), SC Revenue Ruling #09-16.

Yes. Civil penalties are imposed for failing to file an Income Tax return. A failure to file penalty is imposed for failing to file a tax return on or before its due date, determined with regard to any extension of time for filing. The penalty is 5% of the tax amount if the failure is for not more than one month, with an additional 5% for each additional month or fraction of the month during which the failure continues, not to exceed 25% in the aggregate.

Also, a failure to pay penalty is imposed for failing to pay the amount shown as tax on any return on or before its due date, determined with regard to any extension of time for paying. The penalty is 0.5% of the amount of tax if the failure is for not more than one month, with an additional 0.5% for each additional month or fraction of the month during which the failure continues, not to exceed 25% in the aggregate.

Other penalties may apply. See Code Section 12-54-43.

Online Penalty & Interest Calculator

 You may be charged a penalty if:

• You do not pay enough Estimated Tax.
• You do not make your payments by the due date and for the required amount.
• You do not pay at least 90% of the total tax due.

If you’re filing your return online, choose direct deposit when prompted by the software you’re using. If you’re filing a paper SC1040 return, choose direct deposit on line 35 and enter your bank account number and routing number on line 37. If you’re using a tax preparer to file your return, tell your preparer that you want to receive your refund by direct deposit.

No matter how you file your return, you’ll need your bank account number and routing number handy. You can usually find that information on a personal check, by logging in to your bank’s website, or by contacting your bank directly.

Yes. Make sure you tell your preparer that you want to choose the direct deposit option before they finish filing your return. You’ll need to have your bank account number and routing number handy so that they can enter that information on your return.

If you don’t select a refund option, we will mail a paper check to the address you entered on your return.

If you don’t have a bank account, you can receive your refund by paper check. You can cash your check using a check-cashing service. 

No, the SCDOR no longer offers a prepaid debit card refund option. learn more​​

The SCDOR mails a refund check to the address shown on your tax return. Some post offices forward mail for the SCDOR if you filed a change of address with the post office; others do not. If your refund check is returned to the SCDOR by the post office and you notify us of your new mailing address, we will send the check to your new address.

Save time and paper by changing your address on MyDORWAY. Log in to your existing account, select the More tab, then click Manage Names & Addresses under the Names & Addresses section. If you don’t have a MyDORWAY account, complete the SC8822I, and email it along with any required documents to TaxSupport@dor.sc.gov. 

You can check your refund status online at dor.sc.gov/refund or by calling 1-844-898-8542. Amended returns and back year filings may take additional time to process.

Errors found while processing your return may result in additional delays.

In general, a claim for refund must be filed within three years from the date the return was filed or originally due or two years from the date the tax was paid. If a claim is filed within three years from when the return was filed or originally due, the refund is limited to the tax paid within the past three years plus the period of any extension. Withholding, estimated taxes, and amounts paid with extensions are considered to have been paid on the date the return was originally due. If a claim is not filed within three years from the date when the return was filed or originally due, the refund is limited to tax paid during the past two years.

See Code Section 12-54-85, SC Revenue Ruling 13-1

See Code Section 12-6-4910.

No. Social Security benefits and railroad retirement taxed for federal purposes are not subject to tax in South Carolina.

See Code Section 12-6-1120(4).

Retirement income received by a resident individual is taxable in South Carolina. The residency of a taxpayer when the taxpayer receives the retirement income, not the place of employment where the retirement income was earned, determines the taxability of retirement income. South Carolina does not tax the retirement income of nonresident individuals.

See Code Section 12-6-1130. Also, see Code Section 12-6-3500 that provides for a credit over the qualifying taxpayer's lifetime for other state income taxes paid on the employee's contributions.

Yes. 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 and deduct up to $10,000 of such retirement income annually at age 65 and thereafter. For this purpose, "retirement income" means the total of all otherwise taxable income not subject to a penalty for premature distribution from qualified retirement plans (which includes those plans defined in Internal Revenue Code Sections 401, 403, 408, 457) and public employee retirement plans of the federal, state, and local governments, including military retirement.

If both spouses receive retirement income, each spouse is entitled to a retirement income deduction. A surviving spouse who also receives retirement income that is attributable to a deceased spouse is allowed a separate retirement deduction on behalf of the deceased spouse. The deduction for retirement income received as a surviving spouse is based on the age the deceased spouse would have been had they lived.

Refer to SC1040 instructions for more information.

An Income Tax deduction of up to $15,000 is allowed against any South Carolina taxable income of a resident individual who is 65 or older by the end of the tax year. The following requirements apply to this deduction:

a. Amounts deducted as retirement income (see above discussion) reduce this $15,000 deduction.

b. Amounts deducted as a surviving spouse (see above discussion) do not reduce this $15,000 deduction.

c. Taxpayers filing a joint return are allowed a deduction of up to $15,000 when only one spouse is 65 or older and up to $30,000 when both spouses are 65 or older by the end of the tax year.

Note: For taxpayers age 65 and older, the total of the retirement deduction and age 65 and older deduction cannot exceed $15,000 per taxpayer. (Ex. If a taxpayer claims the $10,000 retirement deduction, they would only be eligible for $5,000 as the age 65 and older deduction.)

Refer to SC1040 instructions for more information.

Pension income received while a resident of South Carolina is taxable to South Carolina. However, South Carolina allows a retirement deduction and an age 65 and over deduction.

Refer to SC1040 instructions for more information.

Beginning with tax year 2022, you may deduct all military retirement income included in your South Carolina taxable income.

Refer to SC1040 instructions and SC Revenue Ruling #22-11 for detailed information and examples.​

A complete listing of the available Income Tax credits can be found on our Tax Credits page.

South Carolina provides married individuals filing a joint return a credit equal to .007 of the lesser of:

1. the South Carolina qualified earned income of the spouse with the lower qualified earned income for the year or
2. the following multiplier based on the tax year
• $50,000 for tax year 2023
• $46,667 for tax year 2022
  
• $43,333 for tax year 2021
  
• $40,000 for tax year 2020
  
• $36,667 for tax year 2019
  
• $33,333 for tax year 2018
  
• $30,000 for tax year 2017 and prior
  

See Code Section 12-6-3330 and the SC1040 instructions.

South Carolina allows a credit against taxes paid to another state on income that is taxed in South Carolina and another state. Since the credit is not specifically limited to a tax paid to a state of the United States, the credit is allowed for taxes paid to political entities equivalent to a state which are located outside the borders of the United States. An example of tax paid to a political entity equivalent to a state is a Canadian province. A tax paid to another country, such as Italy, would be equivalent to a tax paid to the United States, not a state, and would not be allowed the credit. Puerto Rico is not considered a state for the purposes of this credit.

See Code Section 12-6-3400.

Refer to the I-319.

See Code Section 12-6-3385, SC Revenue Ruling #09-3.

For tax years 2018 through 2022, a resident taxpayer (full-year or part-year resident) may claim a refundable credit for the lesser of the increase in South Carolina Motor Fuel User Fee paid during the tax year or the preventative maintenance costs incurred in South Carolina during the tax year. The credit is limited to two private passenger motor vehicles or motorcycles. In order to claim the credit, you must keep records (receipts or invoices) to prove the date, amount, and type of the preventative maintenance expenses incurred in South Carolina for each vehicle and records (receipts) on the gallons of motor fuel purchased in South Carolina for each vehicle. The SCDOR will not require you to submit the detailed information with your return. However, the information used to compute your credit should be kept as record to provide SCDOR if the SCDOR questions the credit on your return. To claim the credit, attach a completed I-385 to your return.

Beginning with tax year 2023, the Motor Fuel Income Tax Credit is no longer available

For more information, see SC Revenue Ruling 17-6 and the I-385.

Individual Income Tax rates range from 0% to a top rate of 7% on taxable income for tax years 2021 and prior, 0% to a top rate of 6.5% on taxable income for tax year 2022, and 0 to a top rate of 6.4% on taxable income for tax year 2023. ​Tax brackets are adjusted annually for inflation. Refer to the SC1040TT for the most up-to-date information.

You should receive a W-2 (Wage and Tax Statement) from each of your employers. Employers have until January 31 to send you a W-2 earnings statement.

If you haven’t received your W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

You still must file your tax return or request an extension to file, even if you do not receive your W-2. If you have not received your W-2 by the due date, and have already attempted to contact your employer, you may use an SC4852, Substitute for Form W-2 Wage and Tax Statement. Attach an SC4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified.

On occasion, you may receive your missing W-2 after you filed your return using the SC4852, and the information may be different from what you reported on your return. If this happens, you must amend your return.

South Carolina does not issue W-2 Summary Transcripts. If you are unable to obtain a W-2, see the SC4852 for more information.

The S Corporation or partnership must provide a federal form 1099-MISC marked “SC ONLY” to each nonresident shareholder or partner who had income tax withheld. The 1099-MISC should include the shareholder or partner’s name, address, Social Security Number, and amount of tax withheld. The nonresident shareholder or partner must attach a copy of the 1099-MISC to their South Carolina Income Tax return as verification for the withholding. Do not use a K-1 from the partnership as verification of withholding instead of the 1099-MISC. The nonresident shareholder or partner should claim this withholding on line 20 of their SC1040 as “other SC withholding.”

See Code Section 12-8-590.

South Carolina requires withholding on purchases of real property, or real and associated tangible personal property, from a nonresident seller. The buyer or whoever withholds on the buyer’s behalf is liable for withholding and remitting the money to the SCDOR on the I-290 ​(Nonresident Real Estate Withholding). The withholding payment is due on or before the fifteenth day of the month following the month in which the sale took place.

The nonresident seller is required to file a South Carolina Income Tax return for the year of the sale and report the gain or loss on the sale. On their Income Tax return, the seller will apply the amount withheld against any Income Tax due, and any excess will be refunded.

See Code Section 12-8-580 and SC Revenue Ruling 09-13.