South Carolina retirement taxes in 2026: military retired pay, Social Security and property tax
Short answer
South Carolina does not tax Social Security, and all military retired pay is deductible at any age (since 2022). Other retirement income gets deductions of up to $10,000 at 65+, plus a $15,000 age-65 deduction. The 2026 income tax has two brackets, 1.99% and 5.21%. At 65, the first $50,000 of your home's value is exempt from property tax, and veterans who are totally and permanently service-connected disabled pay no property tax on their home and up to 5 acres.
Not tax advice. Rules change; confirm with the South Carolina Department of Revenue, your county or a tax professional.
South Carolina at a glance (2026)
| South Carolina | |
|---|---|
| State income tax | 1.99% up to $29,999 of taxable income; 5.21% above (2026, new law) |
| Social Security | Not taxed |
| Military retired pay | 100% deductible at any age (from 2022) |
| Other retirement income | Up to $3,000 deducted under 65, up to $10,000 at 65+ |
| Age-65 deduction | $15,000 per person against any income, reduced by retirement deductions claimed |
| 65+ homestead exemption | First $50,000 of fair market value |
| Primary home tax ratio | 4% of value (vs 6% for other property) |
| Total and permanently disabled veteran | Full exemption on the home, up to 5 acres, and two vehicles |
| Average property tax | About 0.49% of home value a year |
Income tax rate (new for 2026)
A 2026 law (Act 110) replaced the rate schedule for tax years starting in 2026:
- 1.99% on taxable income up to $29,999, and 5.21% above that.
- South Carolina now starts from federal AGI and uses its own deduction (the SC Income Adjusted Deduction) instead of the federal standard or itemized deduction: $15,000 single or $30,000 joint, phasing out at higher incomes.
- The top rate was 6% in 2025.
Sources: SC Department of Revenue, Information Letter #26-20 (Aug 31, 2026) and news release on H.4216 (Apr 15, 2026).
Military retired pay
All military retirement income is deductible, at any age, for tax years 2022 and later. Surviving spouses can also claim it. National Guard and Reserve retirees should check Revenue Ruling 22-11, which explains which part of that retirement pay qualifies.
One catch: the military deduction reduces your own $10,000 retirement deduction and $15,000 age-65 deduction, so you can't stack all three on the same income. Source: SC Department of Revenue, Revenue Ruling 22-11.
Pensions, IRA and 401(k)
- Retirement income deduction: up to $3,000 a year under 65, up to $10,000 at 65+.
- Age-65 deduction: $15,000 against any income ($30,000 on a joint return if both spouses are 65+), reduced by any retirement deduction claimed.
Source: SC Department of Revenue, Revenue Ruling 22-11.
Property tax for homeowners 65+
- Homestead exemption: the first $50,000 of your home's fair market value is exempt from county, city, school and special-district taxes. You qualify at 65 (or if totally disabled or legally blind) with one year of South Carolina residency.
- 4% legal residence ratio: your primary home is taxed on 4% of value instead of 6%, and owner-occupied homes don't pay school operating taxes. You must apply.
Source: SC Department of Revenue, SC Tax Incentives for Economic Development, Ch. 5 (Sept 2025).
Disabled veterans
A full property tax exemption on your home and up to 5 acres, plus two vehicles, if the VA rates you totally and permanently service-connected disabled. A surviving spouse can claim it immediately (2024 change). Apply through MyDORWAY. Source: SC Department of Revenue, "Veterans: learn more about SC property tax exemptions" (Nov 4, 2025).
Common mistakes
- Stacking the military deduction with the $10,000 and $15,000 senior deductions. The military deduction reduces them.
- Using 2025 rules. The 2026 rate is 5.21% at the top, and the federal standard deduction no longer applies.
- Assuming the homestead exemption or 4% ratio is automatic. You must apply, and the exemption needs a year of residency.
- Treating a proposed bigger homestead exemption as law. A bill to raise it passed the Senate in 2026 but isn't law.
Moving here?
- Retiring to Myrtle Beach: what your home sale leaves you, and the drive to the hospital and VA
- PCS to Fort Jackson: BAH, neighborhoods and gate drive times
- Federal rules: Is military retirement taxable?
Chris Harris isn't licensed in South Carolina. He'll introduce you to a vetted licensed agent there. Ask Chris →
FAQ
- Does South Carolina tax military retirement?
- No. All military retirement income is deductible at any age, from 2022.
- Does South Carolina tax Social Security?
- No.
- What is South Carolina's income tax rate in 2026?
- 1.99% on taxable income up to $29,999 and 5.21% above that, under a new 2026 law.
- What is the South Carolina homestead exemption for seniors?
- The first $50,000 of your home's fair market value, from age 65, after one year of residency.
- Do disabled veterans pay property tax in South Carolina?
- Not on their home and up to 5 acres, if the VA rates them totally and permanently service-connected disabled.
Sources
- SC Department of Revenue, Information Letter #26-20 (Aug 31, 2026)
- SC Department of Revenue, H.4216 news release (Apr 15, 2026)
- SC Revenue and Fiscal Affairs Office, H.4216 fiscal impact (Mar 30, 2026)
- SC Department of Revenue, retiree tax tips (Nov 12, 2024)
- SC Department of Revenue, Revenue Ruling 22-11: https://dor.sc.gov/resources-site/lawandpolicy/Advisory Opinions/RR22-11.pdf
- SC Department of Revenue, SC Tax Incentives for Economic Development, Ch. 5 (Sept 2025)
- SC Department of Revenue, veterans property tax exemptions (Nov 4, 2025)
- Tax Foundation, South Carolina 2026
Last reviewed October 21, 2026. Not tax advice.
Social Security
Not taxed. The 2026 law kept this and the other retirement deductions. Sources: SC Department of Revenue, retiree tax tips; SC Revenue and Fiscal Affairs Office, H.4216 fiscal impact (Mar 30, 2026).