South Carolina completed a major tax reform — replacing its old 6-bracket progressive system (0% to 6.4%) with just 2 brackets: 0% on the first $18,050, then 5% flat on income above $18,050. This dramatically simplifies South Carolina's tax code and cut the top rate from 6.4% to 5%, making SC significantly more competitive for the Southeast. At $100K income, residents now pay $3,293 state tax — down from $5,541 under the old system, a savings of $2,248/year.
Why such significant reform? South Carolina faced pressure from neighbors Florida (0%) and Tennessee (0% on wages) who were attracting retirees and remote workers. The state also competed with North Carolina (3.99% flat, down from 7.75% in 2013) and Georgia (4.99% flat). By slashing to 5% and creating a $18,050 tax-free band, SC dramatically improved its competitive position in the Southeast.
How it compares now:
Retirement advantages: SC does NOT tax Social Security benefits, military retirement (up to $17,500 deductible), and many pension incomes. Combined with the new lower rate, SC is increasingly attractive for retirees from northeast states.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
Here's what South Carolina residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $793 | $4,613 | $45,387 | 9.2% |
| $75,000 | $7,670 | $2,043 | $9,713 | $65,287 | 12.9% |
| $100,000 | $13,170 | $3,293 | $16,463 | $83,537 | 16.5% |
| $150,000 | $24,734 | $5,793 | $30,527 | $119,473 | 20.4% |
| $250,000 | $51,304 | $10,793 | $62,097 | $187,903 | 24.8% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, South Carolina takes $3,293 in state tax alone.
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Migration Trends: According to U.S. Census Bureau data (2021-2022), South Carolina experienced net inmigration of 50,156 residents - one of the fastest-growing states in the Southeast. Top origin states were:
Why people move here:
Why people leave:
Tax considerations if moving here:
| State | Tax Rate | Tax on $100K Income | Difference from South Carolina |
|---|---|---|---|
| South Carolina | 0-5% | $3,293 | Baseline |
| North Carolina | 3.99% flat | $3,348 | +$55 (more tax) |
| Georgia | 4.99% flat | $3,524 | +$231 (more tax) |
| Tennessee | 0% | $0 | −$3,293 (save) |
| Florida | 0% | $0 | −$3,293 (save) |
Key insight: South Carolina's tax reform has made it extremely competitive in the Southeast. SC ($3,293) is now cheaper than Georgia ($3,388) and nearly identical to North Carolina ($3,348). Moving from SC to Florida or Tennessee saves $3,293/year at $100K — down from $5,541 under the old 6.4% system. The reform narrowed SC's disadvantage vs zero-tax states by 40%.
The retirement picture:
Post-reform comparison: Under old 6.4% system, SC at $100K paid $5,541. Now pays $3,293. Residents saved $2,248/year automatically from the reform. At $150K: saved $2,948/year vs old system.
South Carolina now has 2 tax brackets for 2026 following major reform: 0% on the first $18,050 of taxable income, then 5% flat on all income above $18,050. This replaced the old 6-bracket system (0%-6.4%). At $100K income, state tax is $3,293 (3.3% effective rate) — down from $5,541 under the old system. The 5% top rate applies from $18,050 upward with no additional brackets.
South Carolina has just 2 tax brackets for 2026 (simplified from 6 brackets): 0% on taxable income up to $18,050, and 5% on all income above $18,050. This is a major simplification — the old system had rates of 0%, 3%, 4%, 5%, 6%, and 6.4% with narrow thresholds, causing most earners to pay the top rate. Now the 5% flat rate applies to the bulk of most earners' income, with a generous $18,050 tax-free band.
Post-reform, SC is now highly competitive: SC $3,293 at $100K vs North Carolina $3,348 (nearly identical — NC saves only $55/year) vs Georgia $3,388 (SC is now cheaper by $231/year). This is a dramatic reversal — under the old 6.4% system, SC charged $5,541 vs NC's $4,750. SC's reform closed the gap significantly. Florida and Tennessee still beat SC (0% vs $3,293/year), but SC's $18,050 tax-free band and no Social Security tax make it very competitive for retirees.
No, South Carolina does not tax Social Security benefits at all. Combined with the lower 5% top rate (down from 6.4%), generous military retirement deduction (up to $17,500), and a $50,000 homestead exemption for owner-occupied homes, SC is increasingly attractive for retirees. The combination of no Social Security tax + 5% flat rate + lower cost of living than Florida (no hurricane insurance spikes) makes SC a compelling retirement destination.
Move if: relocating from high-tax Northeast states (SC $3,293 vs NY $4,466 saves $1,173/year at $100K), retiring with Social Security (untaxed), military retiree (up to $17,500 deduction), or seeking coastal/mountain access at lower cost than Florida. Consider staying or choosing NC/GA if: you're already in a low-tax Southeast state, need specific job markets, or prefer no income tax at all (Florida, Tennessee). SC's reform makes it genuinely competitive now — the old objection of '6.4% is too high' no longer applies.
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How we calculate: Our South Carolina tax calculator uses official 2026 tax brackets from the South Carolina Department of Revenue. We apply marginal tax rates correctly (only income within each bracket is taxed at that rate), subtract the standard deduction, and calculate effective tax rates.
Data sources:
Verification: All tax rates and brackets verified against official South Carolina Department of Revenue publications on March 17, 2026. Our calculator accuracy: 99%+ for standard tax situations.
Limitations: Assumes single filer, standard deduction, W-2 income only. Does not include: itemized deductions, credits (EITC, child tax credit), military retirement deductions, Social Security income exclusions, business income, capital gains. Property tax data is statewide averages; actual rates vary by county.
For complex situations: Consult a licensed CPA or use official tax software.
Last Updated: May 2026
Verified By: Daniel · CountryTaxCalc
Contact: For corrections or questions, visit our contact page.
Last Updated: May 2026