South Carolina state income tax
South Carolina has a state income tax. It is graduated, with a top marginal rate of 5.21%. Act 110 / H.4216 (signed by Gov. McMaster 3/30/2026) replaced the old 0%/3%/6% three-bracket schedule starting with tax year 2026. New structure: 1.99% on taxable income below $30,000; 5.21% (minus a $966 subtraction, so the two brackets meet at $30,000) on income at or above $30,000. The law also creates an automatic further-reduction mechanism: if the Board of Economic Advisors certifies revenue growth of 5%+ year over year, the top rate is cut again (capped at $200M in annual revenue impact), with any new rate set by BEA no later than Feb 15 each year. Applies beginning with 2026 returns (due 4/15/2027); does not change 2025 returns. Capital gains are not taxed.
Does South Carolina have a state income tax?
Yes. South Carolina taxes individual income on a graduated schedule topping out at 5.21%. Act 110 / H.4216 (signed by Gov. McMaster 3/30/2026) replaced the old 0%/3%/6% three-bracket schedule starting with tax year 2026. New structure: 1.99% on taxable income below $30,000; 5.21% (minus a $966 subtraction, so the two brackets meet at $30,000) on income at or above $30,000. The law also creates an automatic further-reduction mechanism: if the Board of Economic Advisors certifies revenue growth of 5%+ year over year, the top rate is cut again (capped at $200M in annual revenue impact), with any new rate set by BEA no later than Feb 15 each year. Applies beginning with 2026 returns (due 4/15/2027); does not change 2025 returns.
| Item | South Carolina |
|---|---|
| State income tax | Yes, graduated |
| Top marginal rate | 5.21% |
| Capital gains | Not taxed |
| State sales tax | 6% (plus local) |
| Avg. property tax rate | 0.49% of home value |
| Estate / inheritance tax | None |
How does South Carolina tax capital gains?
South Carolina has no separate, lower rate for capital gains. They are taxed as ordinary income at the same rates as your wages, up to 5.21%, on top of federal capital gains tax. See how capital gains tax works in 2026.
What about retirement income in South Carolina?
Retirement income is taxed differently from wages in many states. For how South Carolina treats Social Security, pensions, and 401(k)/IRA withdrawals, see South Carolina retirement taxes.
Sources
- South Carolina income tax rates and brackets: South Carolina Department of Revenue / Taxation.
- South Carolina capital gains treatment: South Carolina tax authority.
- South Carolina sales tax: South Carolina Department of Revenue.