South Carolina Taxes: Everything You Need to Know

With low property taxes and generous income tax breaks for seniors, South Carolina has landed on Kiplinger’s list of Top 10 tax-friendly states for retirees.

David Slade, The Post and Courier

 

The Woodside team of professionals has compiled a list of the most popular questions on South Carolina taxes below to be your total resource on this key retirement topic.

 

 

 

 

 

 

 

 

 

 

Q: What makes South Carolina the best choice for budget-conscious retirees?

Trusted financial website www.smartasset.com cites low cost of living, warm climate, and low property taxes as primary factors in South Carolina’s tax haven status. At Woodside, retirees also have several added bonuses. Aiken, SC is a college town and boasts all the arts and educational opportunities that come along with that resource. In addition, Aiken is centrally located in the heart of world-class healthcare organizations. (This includes a VA facility in nearby Augusta, GA.) With a social lifestyle abundant with amenities, Woodside and Aiken, SC are a perfect fit for active adults.

Q: How are Social Security retirement benefits taxed in the state of South Carolina?

South Carolina provides a full income tax exemption for Social Security retirement benefits.

Q: Are other sources of retirement income taxable in South Carolina?

While retirement income sources like 401(k) and IRA plans, government pensions and public pensions are taxable, they are heavily deductible. For taxpayers under age 65, the deduction is $3,000. For seniors age 65 and older, the deductible is $15,000. (In other words, if the total income from all these sources is under $15,000, no taxes are due.) Above that limit taxes would be paid according to the rates in the table below:

South Carolina Taxable Income Rate
$0 – $2,910 0.00%
$2,910 – $5,820 3.00%
$5,820 – $8,730 4.00%
$8,730 – $11,640 5.00%
$11,640 – $14,550 6.00%
$14,550+ 7.00%

Q: Does South Carolina have high property taxes?

Assuredly not! According to www.smartasset.com, South Carolina’s property taxes are among the lowest in the United States. The average effective property tax rate is just 0.57%. (This means homeowners can expect to pay about $570 for every $100,000 in home value.)

Q: What is the South Carolina Homestead exemption?

“The Homestead Exemption is a complete exemption of taxes on the first $50,000 in Fair Market Value of your Legal Residence for homeowners over age 65, totally and permanently disabled, or legally blind.” In other words, if you are over 65 and have a home valued at $300,000, taxes will only be assessed on $250,000 in property value. Visit the South Carolina Department of Revenue for more information.

Q: What other South Carolina state tax regulations should I be aware of as a retiree?

South Carolina taxes gains on investments held for longer than one year at a rate shown in the tables above. However, these gains currently have a 44% exemption. South Carolina does not have an estate or inheritance tax.

 

Aiken, South Carolina’s incredible cost of living is another key factor to consider when determining your retirement destination. For comparisons between Aiken, SC and other popular retirement and pre-retirement destinations courtesy of Sperling’s Best Places, visit our blog here. To request more information on Woodside and Aiken, fill out the contact form below:

 

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*Note that these figures have been verified as of November 15, 2017, but are subject to change without notice at the discretion of government agencies.