Partly taxed
How South Carolina taxes retirement income
South Carolina does not tax Social Security. Retirement income gets a deduction of $3,000 a year under age 65 and $10,000 a year from 65. It covers pensions from SCRS and other public plans as well as 401(k), 403(b), 457(b) and IRA withdrawals.
At 65 and older there is also a separate $15,000 deduction against any kind of income, reduced by the retirement deduction you claim. Put together, a single retiree 65 or older can usually shelter $15,000 of retirement income, and a married couple both 65 or older can shelter $30,000. Military retirement pay is fully deductible.
Income above the deductions is taxed at rates up to 6%, and the state has been cutting its top rate in steps.
Questions
Does South Carolina tax SCRS pensions?
Partly. At 65 and older, the retirement and age deductions together usually shelter $15,000 per person.
Does South Carolina tax Social Security?
No. Social Security is fully exempt.
Is military retirement taxed?
No. Military retirement pay is fully deductible.