Military retirement pay in South Carolina
Varies
Does South Carolina Tax Military Retirement Pay?
Short answer: No. South Carolina fully exempts armed forces retired pay from state income tax (since tax year 2022). The exemption does not cover USPHS or NOAA Corps retirees; 2026 bills to add them did not advance. Other retirement income: Taxpayers under 65 may deduct up to $3,000 and those 65+ up to $10,000 per person of retirement income (pensions, 401(k), IRA). Those 65+ also get a $15,000 age deduction against any income, reduced by the retirement deduction claimed.
Military retired pay is taxable federally; VA disability compensation isn't taxed federally or by any state.
Records to keep: Keep your state return, W-2s and 1099s (1099-R, SSA-1099), and any state credit worksheets. Check your state revenue department's current-year instructions before you file.
Military retirement pay in South Carolina
Varies
Individuals / Personal Taxes
No. South Carolina fully exempts armed forces retired pay from state income tax (since tax year 2022). The exemption does not cover USPHS or NOAA Corps retirees; 2026 bills to add them did not advance. Other retirement income: Taxpayers under 65 may deduct up to $3,000 and those 65+ up to $10,000 per person of retirement income (pensions, 401(k), IRA). Those 65+ also get a $15,000 age deduction against any income, reduced by the retirement deduction claimed.
Business justification
No. South Carolina fully exempts armed forces retired pay from state income tax (since tax year 2022). The exemption does not cover USPHS or NOAA Corps retirees; 2026 bills to add them did not advance. Other retirement income: Taxpayers under 65 may deduct up to $3,000 and those 65+ up to $10,000 per person of retirement income (pensions, 401(k), IRA). Those 65+ also get a $15,000 age deduction against any income, reduced by the retirement deduction claimed. Military retired pay is taxable federally; VA disability compensation isn't taxed federally or by any state.
Category
- Personal Tax Deductions