On the ordinary retirement profile — $34,000 of Social Security and $61,000 of plan distributions — South Carolina takes $1,066 a year in state income tax.
That is the number people compare, and it is the smallest of three. Property tax adds about $1,800 on the state's $359,900 median home, and insurance another $2,250. The three together come to $5,116, placing South Carolina 3rd of 50.
A note before you start. This is general education, not tax advice. Every South Carolina figure comes from this site's own fifty-state income-tax dataset and its retirement tax engine, computed for a single filer aged 70 unless stated otherwise; property tax, median home price and insurance figures come from the site's core state dataset. Rates are for tax year 2026. Property tax is assessed locally in most states, so the effective rate here is a statewide figure rather than your county's.
1. What South Carolina takes from retirement income
| Income stream | South Carolina tax |
|---|---|
| Social Security | $0 on $40,000 |
| 401(k), 403(b), 457(b), traditional IRA | $1,066 on the typical profile |
| Private employer pension | $498 on $50,000 |
| Public and federal government pension | $498 on $50,000 |
| Military retired pay | $498 on $50,000 |
On Social Security. South Carolina does not tax Social Security or Railroad Retirement benefits. Benefits arrive through federal taxable income and are subtracted in arriving at South Carolina taxable income, with no income threshold, no age condition, and no phase-out. Note the interaction with SCIAD: because Social Security is subtracted for South Carolina purposes but is still in federal AGI, and the SCIAD phase-out is tested on federal AGI, a retiree's Social Security can push them out of the SCIAD range even though the benefits themselves are untaxed.
On 401(k) and IRA distributions. Two different deductions at two different ages, and collapsing them is the standard error. Under S.C. Code Section 12-6-1170(A) the original owner of a qualified retirement account may deduct up to $3,000 of retirement income per year through age 64, rising to up to $10,000 per year at age 65 and thereafter. The deduction is per taxpayer, which is why married-joint reads $20,000 — but only where each spouse has their own qualified retirement income; it is not a joint allowance. 'Retirement income' is defined broadly as otherwise taxable income not subject to a penalty for premature distribution received from plans defined in IRC sections 401, 403, 408 and 457, plus all public employee retirement plans of federal, state and local governments including military retirement — so an early withdrawal that carries a federal penalty is outside the definition entirely and gets nothing. A surviving spouse may claim the deduction for retirement income attributable to a deceased spouse in the same manner it would have applied to the deceased, in addition to the deduction for their own retirement income.
2. The rule that decides your South Carolina bill
South Carolina does not fully exempt military retirement, and that is worth stating flatly because the opposite is widely repeated. All three pension types run through the general retirement income deduction of Section 12-6-1170(A) — $3,000 under 65, $10,000 at 65 and over — since the statutory definition of 'retirement income' expressly includes 'all public employee retirement plans of the federal, state, and local governments, including military retirement.' Military retirees get a separate, larger but still capped deduction under Section 12-6-1171, and it comes in two forms. (1) at any age, a military retiree with both earned income and military retirement income may deduct South Carolina earned income equal to the military retirement income included in South Carolina taxable income, capped at $17,500 — note this reduces earned income, not the pension itself, so a retiree with no job gets nothing from it. (2) at age 65 and over, a military retiree may deduct up to $30,000 of military retirement income directly. Both were fully phased in by 2020. The anti-stacking rules are real: a taxpayer claiming a 12-6-1171 deduction has their 12-6-1170(B) age-65 general deduction reduced by that amount (with a surviving-spouse exception), and on a joint return the reduction is computed for each individual separately as though they had not filed jointly.
South Carolina's retirement package is a stack of interacting, income- and age-limited deductions rather than a clean exemption, and the interactions all run one way — claiming one deduction shrinks another.
Act 110 of 2026 rebuilt the front of the South Carolina return (rates, and the replacement of federal deductions with SCIAD) but did not, on the face of the act, repeal or amend the retirement deductions in Sections 12-6-1170 and 12-6-1171 — the act's own text cross-references 12-6-1170(B) when computing SCIAD, which confirms 12-6-1170 survives.
3. What South Carolina charges at three income levels
The same state, three retirements. All figures are for a single filer aged 70.
| Profile | Income | South Carolina tax | Effective rate |
|---|---|---|---|
| Modest | $24,000 Social Security + $31,000 distributions | $119 | 0.2% |
| Typical | $34,000 Social Security + $61,000 distributions | $1,066 | 1.1% |
| Affluent | $40,000 + $100,000 + $40,000 other | $5,807 | 3.2% |
The marginal rate at the typical profile is 5.2%. That is what an extra dollar of distribution costs — a larger number than the 1.1% effective rate, and the one that matters when deciding how much to withdraw.
A married couple with $48,000 of Social Security and $62,000 of distributions pays $239.
Run your own income against South Carolina and every other state4. Property tax, and why it lands harder in retirement
An effective rate of 0.5% on the state's $359,900 median home is about $1,800 a year.
For a retiree this is a harder cost than income tax, and the reason is structural: property tax is levied on the house, while retirement income falls. A bill sized to a working income arrives every year after the income has gone.
It is also assessed locally almost everywhere, so a statewide effective rate conceals real variation between counties. Treat the figure above as the state's shape rather than as your bill.
South Carolina does have a homestead provision, and it is the one lever on this line worth understanding.
South Carolina's Homestead Exemption exempts the first $50,000 of Fair Market Value of a legal residence from property tax, for homeowners age 65+ (or permanently disabled/legally blind), who have been an SC legal resident for at least one year. Only one spouse in a jointly-owned home need meet the age/disability requirement. Applies to the home and up to 5 contiguous acres. Not automatic — apply with the county auditor between January 1 and July 15 of the year after turning 65. This is separate from and stacks on top of SC's 4% owner-occupied assessment ratio (vs. 6% for non-owner-occupied property), which is the larger driver of SC's low effective property tax rates and is not age-restricted.
Two things about homestead rules catch people out after a move. They almost always require the property to be your primary residence, which a snowbird splitting the year has to be able to demonstrate. And several states require an application to the county rather than granting it automatically — a benefit you qualify for and never claimed is worth nothing.
5. Insurance, the line nobody prices
Average home insurance in South Carolina: $2,250 a year — 21st cheapest of the fifty states.
This is the line almost no retirement comparison includes, and across the country it varies more than income tax does: from Hawaii's $900 to Florida's $8,375, a ninefold spread.
For a retiree it behaves like a second property tax. It rises independently of income, a fixed-income household absorbs the whole increase, and it is a condition of the mortgage if you still have one.
6. What retiring in South Carolina actually costs
Income tax on the typical retirement profile, plus property tax and insurance on each state's own median home. South Carolina is shown against its own neighbours in the ranking, and against the extremes.
| State | Income tax | Property tax | Insurance | Total |
|---|---|---|---|---|
| Wyoming | $0 | $2,083 | $1,900 | $3,983 |
| Nevada | $0 | $2,489 | $2,025 | $4,514 |
| South Carolina | $1,066 | $1,800 | $2,250 | $5,116 |
| Arizona | $1,131 | $2,152 | $2,135 | $5,418 |
| West Virginia | $1,571 | $1,508 | $2,465 | $5,544 |
| Delaware | $2,125 | $2,152 | $1,375 | $5,652 |
| Minnesota | $4,937 | $3,750 | $3,615 | $12,302 |
| Connecticut | $4,475 | $8,779 | $2,690 | $15,944 |
South Carolina comes to $5,116, 3rd of 50.
Income tax is 21% of that total. It is the line every comparison leads with and, here, not the largest of the three.
One large caveat, and it matters. Each row uses that state's own median home, and those differ a great deal. So this compares the typical house in each state, not the same house in each state — buying below a state's median improves its figure materially.
7. The age that changes your South Carolina bill
The same $50,000 of plan distributions costs $1,000 at 60 and $498 at 70. That is an age trigger, and it is worth $502 a year to wait — or, put the other way, it is what retiring early costs you in South Carolina on top of everything else. Two different deductions at two different ages, and collapsing them is the standard error. Under S.C. Code Section 12-6-1170(A) the original owner of a qualified retirement account may deduct up to $3,000 of retirement income per year through age 64, rising to up to $10,000 per year at age 65 and thereafter. The deduction is per taxpayer, which is why married-joint reads $20,000 — but only where each spouse has their own qualified retirement income; it is not a joint allowance. 'Retirement income' is defined broadly as otherwise taxable income not subject to a penalty for premature distribution received from plans defined in IRC sections 401, 403, 408 and 457, plus all public employee retirement plans of federal, state and local governments including military retirement — so an early withdrawal that carries a federal penalty is outside the definition entirely and gets nothing. A surviving spouse may claim the deduction for retirement income attributable to a deceased spouse in the same manner it would have applied to the deceased, in addition to the deduction for their own retirement income. It also changes the withdrawal order. Someone retiring before the trigger age has a reason to draw on taxable or Roth money first and leave the pre-tax balance until the exclusion applies.
8. What a Roth conversion costs in South Carolina
Converting $50,000 to a Roth costs an extra $3,230 in South Carolina tax — 6.5 cents on the dollar.
| Converted | Extra South Carolina tax | Cost per dollar |
|---|---|---|
| $50,000 | $3,230 | 6.5% |
| $100,000 | $5,835 | 5.8% |
These are computed, not read off the bracket table, which matters because a conversion large enough to be worth making usually leaves the bracket it started in.
The state's share is the part you can move. Convert in a year you are resident somewhere with no income tax and it is zero; convert here and it is 6.5%. The federal tax is due either way.
9. What part-time work costs here
$20,000 of part-time work costs an extra $1,326 in South Carolina tax — an effective 6.6% on the earnings.
Compare that with the 6.5% a Roth conversion costs. Wages are the more expensive dollar here.
Two federal rules apply on top and neither depends on your state. Earnings can raise the taxable share of Social Security, and claiming before full retirement age exposes you to the federal earnings test.
10. The order to draw your accounts in
The order you draw accounts in is worth real money, and the right order depends on the state.
Before the age trigger, draw from taxable and Roth money first. South Carolina charges $1,000 on $50,000 of plan distributions at 60 and $498 at 70, so a dollar taken early costs more than the same dollar taken later.
After the trigger, the pre-tax balance becomes the cheap source and the order reverses.
Required minimum distributions overrule all of this from 73 onward. Once they begin you must take the calculated amount whether the order suits you or not, which is the argument for drawing down or converting the pre-tax balance in the years before.
11. Or move across the state line
For most people the real alternative to South Carolina is not Wyoming — it is the state on the other side of the line, near the same family, the same doctors and the same weather.
| State | Income tax | Property tax | Insurance | Total | Rank |
|---|---|---|---|---|---|
| South Carolina | $1,066 | $1,800 | $2,250 | $5,116 | 3 |
| Georgia | $0 | $2,808 | $3,225 | $6,033 | 10 |
| North Carolina | $1,925 | $2,525 | $3,025 | $7,475 | 26 |
South Carolina is the cheapest of the group on these three lines, at $5,116. Crossing any of these borders costs money.
One thing this table cannot show is the county. Property tax is set locally, and the spread inside a single state is routinely wider than the gap between two neighbouring states. A border move to a cheaper state and an expensive county can leave you worse off.
12. If you are moving to South Carolina from somewhere else
The eight most populous states people leave, measured against South Carolina on the same three lines.
| Moving from | Their total | South Carolina | Difference |
|---|---|---|---|
| California | $9,520 | $5,116 | $4,404 cheaper |
| Texas | $9,745 | $5,116 | $4,629 cheaper |
| Florida | $11,690 | $5,116 | $6,574 cheaper |
| New York | $10,287 | $5,116 | $5,171 cheaper |
| Pennsylvania | $6,465 | $5,116 | $1,349 cheaper |
| Illinois | $8,391 | $5,116 | $3,275 cheaper |
| Ohio | $6,380 | $5,116 | $1,264 cheaper |
| Georgia | $6,033 | $5,116 | $917 cheaper |
South Carolina is cheaper than 8 of these eight. That is the case for the move, on these lines.
A move is not free, and this table does not price it. Transaction costs on both houses run to several per cent of the sale price, and at typical values that is often more than the first two or three years of the saving.
South Carolina charges a transfer tax on the purchase itself — 0.4%, customarily paid by the seller. On the state's $359,900 median home that is about $1,332, once, at the point of sale. Closing costs here run about 2% to 5% of the price — $7,198 to $17,995 on the median home, which is the real entry fee for the annual saving this article has been describing.
13. Where these South Carolina figures are approximate
Every income tax figure above comes from this site's own South Carolina record, and that record notes its own limits. They are reproduced here rather than left in the dataset, because a reader who falls into one of these cases is being quoted a number that is wrong for them.
- Modelling any single one in isolation overstates the relief.
None of this affects the property tax or insurance lines, which come from a separate dataset and are not modelled.
If you are in one of the cases above, treat the income tax figure as the shape rather than the amount and get the number from a preparer who can see your actual return.
14. What South Carolina does not exempt you from
The federal system, entirely. This is the commonest misunderstanding about state retirement taxation, and it is worth stating plainly.
Required minimum distributions still apply. The amount is federal — your prior-year balance divided by an IRS life expectancy factor — and identical in all fifty states. A state changes what the distribution costs you, not whether you must take it.
Social Security is still federally taxable, on the federal provisional-income calculation, whatever your state does with it.
IRMAA still applies, with its two-year lag. A large conversion or distribution raises a Medicare premium two years later regardless of address.
And capital gains are still federally taxed. What South Carolina adds on top is a separate question from what the federal system takes.
15. Establishing that you actually live here
Any state tax advantage is worth nothing until South Carolina is your domicile, and the state you left may disagree about when that happened.
High-tax states audit departing residents. The question is not whether you own a home here; it is whether you genuinely abandoned the old domicile. Days spent in each state, voter registration, vehicle registration, where your doctors are and where you claim a homestead all bear on it.
The snowbird case is the risky one. Splitting the year between two states while keeping a home in both is exactly the profile a residency audit is built for. If a plan depends on the saving, count the days from the first year rather than reconstructing them afterwards.
16. Who South Carolina actually suits
It suits an affluent retiree least. At the affluent profile the bill is $5,807, and whatever exclusion helps a modest income has stopped helping by then.
17. What to check before you decide
Get your county's actual property tax rate, not the state average. Property tax is levied locally almost everywhere, and the spread inside a state is often wider than the spread between states.
Get a real insurance quote on a real address. $2,250 is the state average; construction, roof age and exposure move it a long way.
Work out your own income tax rather than using the profile above. $95,000 split one way is not $95,000 split another, and in South Carolina the mix between Social Security and distributions changes the answer.
And check what your current state actually charges you before assuming it is worse. On these three lines the ranking surprises people in both directions.
Frequently asked questions
Does South Carolina tax Social Security? No. South Carolina does not tax Social Security or Railroad Retirement benefits. Benefits arrive through federal taxable income and are subtracted in arriving at South Carolina taxable income, with no income threshold, no age condition, and no phase-out. Note the interaction with SCIAD: because Social Security is subtracted for South Carolina purposes but is still in federal AGI, and the SCIAD phase-out is tested on federal AGI, a retiree's Social Security can push them out of the SCIAD range even though the benefits themselves are untaxed.
Does South Carolina tax 401(k) or IRA withdrawals? Two different deductions at two different ages, and collapsing them is the standard error. Under S.C. Code Section 12-6-1170(A) the original owner of a qualified retirement account may deduct up to $3,000 of retirement income per year through age 64, rising to up to $10,000 per year at age 65 and thereafter. The deduction is per taxpayer, which is why married-joint reads $20,000 — but only where each spouse has their own qualified retirement income; it is not a joint allowance.
What about pensions — private, government, or military? A $50,000 pension costs $498 if private, $498 if a government pension, and $498 if military retired pay.
What does retiring in South Carolina actually cost? Income tax of $1,066 on the typical profile, plus about $1,800 of property tax and $2,250 of insurance on the median home — $5,116, which is 3rd of 50.
Is South Carolina a cheap state to retire in? On these three lines it ranks 3rd of 50. Whether that makes it cheap for you depends far more on the house than on the tax code.
Is there an age at which the tax falls? Yes. The same $50,000 of plan distributions costs $1,000 at 60 and $498 at 70.
What does a Roth conversion cost in South Carolina? An extra $3,230 in state tax on $50,000 converted, and $5,835 on $100,000. That is 6.5% of the amount converted, on top of the federal tax.
Does part-time work get taxed differently from my 401(k) withdrawals? $20,000 of part-time earnings costs $1,326 in state tax, an effective 6.6%.
Would a neighbouring state be cheaper than South Carolina? No — South Carolina is the cheapest of itself and its neighbours on these three lines, at $5,116.
Do required minimum distributions change if I move here? No. The required amount is a federal calculation and identical in every state. What changes is what the distribution costs once taken.
Does this article include local income tax? No local income tax applies to retirement income in South Carolina on the figures used here.
Will South Carolina's treatment still apply in ten years? State legislatures revise retirement taxation regularly — several states have changed theirs in the past three years. Figures here are for tax year 2026 and are worth re-checking before a move.
What to do next
Two numbers decide this and neither is the one in the headline: your county's actual property tax rate, and a real insurance quote on a real address.
- Retirement state tax calculator — what any state charges on your income, cited per state
- RMD calculator — the distribution you must take, which no state changes
- Home insurance premium estimator — the line this article says decides it
- The Relocation Tax Playbook — establishing domicile, and the states that contest it