South Carolina State Income Tax Rates and Brackets for 2025

Key Takeaways

• South Carolina’s top state income tax rate drops to 6.2% for income above $17,830 in 2025.
• Income brackets adjusted for inflation; 0% rate applies up to $3,560 taxable income for 2025.
• New tax rates effective January 1, 2025; tax returns due April 15, 2026, with updated withholding required.

South Carolina’s state income tax rates and brackets for 2025 have changed, bringing important updates for residents, newcomers, and anyone planning to move to or work in South Carolina. These changes affect how much tax you’ll pay, how you’ll file your state return, and what you should expect for the coming year. Here’s a clear summary of what’s new, who is affected, when these changes take effect, what actions you need to take, and what these changes mean for pending or future tax filings.

Summary of What Changed

For the 2025 tax year, South Carolina has updated its state income tax rates and brackets. The most important changes include:

• The top marginal tax rate is now 6.2% for income above $17,830. This is a reduction from the previous top rate of 6.4% and continues the trend of lowering state income tax rates in South Carolina.
• The income brackets have been adjusted for inflation. The 0% tax bracket now covers income up to $3,560, up from $3,200 in the previous year.
• The tax calculation method still uses a system where a fixed dollar amount is subtracted from the tax owed in each bracket, making the transition between brackets smoother.
• There is a pending bill that could change the system to a flat tax rate of 3.99% starting in 2026, but this does not affect the 2025 tax year.

These changes are effective for the 2025 tax year, which means they apply to income earned from January 1, 2025, through December 31, 2025.

Who Is Affected by the 2025 Changes

The updated state income tax rates and brackets in South Carolina for 2025 affect several groups:

• All South Carolina residents who earn taxable income in 2025.
• New residents who move to South Carolina in 2025 and need to file a state income tax return.
• Non-residents who earn income in South Carolina and must file a state return.
• Employers who withhold state income tax from employee paychecks.
• Retirees and those with Social Security, pension, or retirement account income.
• Students, immigrants, and temporary workers who have South Carolina taxable income.

If you are planning to move to South Carolina, start a new job, or retire in the state, these changes will directly affect your tax situation.

Effective Dates and Key Deadlines

• The new rates and brackets are effective January 1, 2025.
• You will use these rates when filing your 2025 South Carolina state income tax return, which is due by April 15, 2026 (unless you file for an extension).
• Employers must update payroll systems to reflect the new withholding rates starting with paychecks issued in 2025.
• If you make estimated tax payments, use the new brackets and rates for your 2025 calculations.

2025 South Carolina State Income Tax Rates and Brackets

Here are the updated state income tax rates and brackets for South Carolina in 2025 for single filers:

Key Points:

• 0% Rate: If your taxable income is $3,560 or less, you pay no state income tax.
• 3% Rate: If your taxable income is between $3,560 and $17,830, you pay 3% on the amount over $3,560, minus $107.
• 6.2% Rate: If your taxable income is over $17,830, you pay 6.2% on the amount over $17,830, minus $463.

These brackets are indexed for inflation, meaning they may increase slightly each year to keep up with the cost of living.

How to Calculate Your South Carolina State Income Tax for 2025

To figure out your state income tax for 2025, follow these steps:

1. Find your South Carolina taxable income. This usually starts with your federal taxable income, but you must make certain adjustments. For example, you must add back state and local taxes you deducted on your federal return, but you can subtract Social Security income and some U.S. government bond interest.
2. Apply the correct tax rate and calculation. Use the table above to see which bracket your income falls into.
3. Subtract the fixed amount listed in the calculation details for your bracket.
4. Check for deductions and credits. South Carolina allows the same standard deduction as the federal government. You may also qualify for other deductions, such as the retirement income exclusion.

Example Calculations:

• If you earn $3,000 in taxable income:
  You pay 0% state income tax. No tax is owed.
• If you earn $10,000 in taxable income:
  You pay 3% on ($10,000 – $3,560) = $6,440.
  3% of $6,440 = $193.20.
  Subtract $107: $193.20 – $107 = $86.20 total state income tax.
• If you earn $25,000 in taxable income:
  You pay 6.2% on ($25,000 – $17,830) = $7,170.
  6.2% of $7,170 = $444.
  Subtract $463: $444 – $463 = -$19.
  However, you must also add the tax from the lower brackets, so use the official tax tables or software for the exact calculation.

Required Actions for Taxpayers and Employers

If you live or work in South Carolina, here’s what you need to do for the 2025 tax year:

• Taxpayers:
  • Review your income and deductions to estimate your 2025 South Carolina state income tax.
  • Update your withholding with your employer if your income or filing status changes.
  • If you make estimated tax payments, use the new brackets and rates for your 2025 payments.
  • Gather documents for any deductions or credits you plan to claim, such as retirement income exclusions.
  • File your 2025 South Carolina state income tax return by April 15, 2026.
• Employers:
  • Update payroll systems to use the new 2025 withholding tables.
  • Provide employees with updated withholding forms if needed.
  • Remit withheld taxes to the South Carolina Department of Revenue on schedule.
• New Residents and Immigrants:
  • Learn about South Carolina’s tax system and how it differs from your previous state or country.
  • Adjust your tax planning for the new rates and brackets.
  • If you are a non-resident with South Carolina income, check if you need to file a state return.

Implications for Pending Applications and Future Tax Years

If you have already filed your 2024 return or are waiting for a refund, these changes do not affect your 2024 taxes. The 6.2% top rate was retroactively applied to 2024, but the main impact is for 2025 and beyond.

For those planning ahead:

• Pending Legislation: There is a bill under consideration that would change South Carolina’s income tax to a flat rate of 3.99% starting in 2026. This would replace the current graduated system. However, this is not yet law, so for 2025, the three-tier system remains in place.
• Future Planning: If you expect your income to change, or if you are considering retirement or moving to South Carolina, keep an eye on legislative updates. The move to a flat tax could affect your tax bill in future years.

Special Rules and Deductions

South Carolina offers several important deductions and exclusions that can lower your state income tax:

• Standard Deduction: South Carolina uses the same standard deduction as the federal government. For 2025, this amount is expected to be indexed for inflation.
• Retirement Income Exclusion: If you are retired, you can exclude up to $15,000 of retirement income from your South Carolina taxable income. This includes income from pensions, 401(k)s, and IRAs.
• Social Security Benefits: Social Security income is not taxed by South Carolina.
• Other Deductions: Interest from U.S. government bonds and certain other federal obligations can be subtracted from your South Carolina taxable income.

Other South Carolina State Taxes

While the focus here is on state income tax rates, it’s helpful to know about other state taxes:

• State Sales Tax: The base rate is 6%, but local counties can add their own sales taxes. The average combined rate is about 7.5%.
• Property Taxes: South Carolina has relatively low property taxes, with an average effective rate of 0.46%. Seniors and disabled persons may qualify for homestead exemptions.
• No Estate or Inheritance Tax: South Carolina does not tax estates or inheritances.

Official Resources and Where to Get Help

For the most accurate and up-to-date information, always use official government resources. The South Carolina Department of Revenue (SCDOR) provides detailed tax tables, forms, and instructions for the 2025 tax year. You can find the latest withholding tables and forms on the SCDOR official website.

If you have questions about your specific situation, consider speaking with a tax professional or using reputable tax software that is updated for the 2025 rates.

Expert and Stakeholder Perspectives

Tax experts say that the gradual reduction in South Carolina’s top marginal rate is part of the state’s plan to attract more businesses and retirees. Lower state income tax rates can make South Carolina more appealing for people looking to move from higher-tax states.

However, the proposed shift to a flat tax rate of 3.99% in 2026 has sparked debate. Supporters believe a flat tax would make filing simpler and lower taxes for many people. Critics worry that it could reduce state revenue and make the tax system less fair for lower-income residents.

State officials stress the need to balance tax relief with funding for public services, such as schools and roads. As reported by VisaVerge.com, these ongoing discussions show that tax policy changes can have wide-reaching effects on families, workers, and the state’s economy.

Practical Guidance and Next Steps

If you live, work, or plan to move to South Carolina, here’s what you should do now:

• Check your income and deductions to see how the new brackets affect you.
• Update your withholding with your employer if your situation changes.
• Plan for estimated tax payments using the 2025 rates if you are self-employed or have other income not subject to withholding.
• Watch for legislative updates about the possible flat tax in 2026.
• Use official resources like the SCDOR website for forms, tables, and instructions.
• Consult a tax professional if you have complex income or are unsure about your filing status.

Summary Table: 2025 South Carolina State Income Tax Brackets

Conclusion

South Carolina’s state income tax rates for 2025 continue the state’s move toward lower taxes, with a top rate of 6.2% and inflation-adjusted brackets. These changes affect all taxpayers in the state, including residents, newcomers, and those with retirement income. While a flat tax may be coming in 2026, for now, the three-tier system remains in place. Stay informed, use official resources, and take action to make sure you’re ready for the 2025 tax year.

Learn Today

Marginal Tax Rate → The percentage paid on the last dollar of taxable income within a specific bracket.
Tax Bracket → Income range taxed at a particular rate under the state’s tax system for a tax year.
Withholding → Money an employer deducts from employee paychecks to prepay income taxes owed to the state.
Standard Deduction → A fixed dollar amount subtracted from income before tax calculations, standardizing tax base reductions.
Flat Tax → A proposed single tax rate applied uniformly to all taxable income, replacing graduated brackets.

This Article in a Nutshell

South Carolina lowers its top state income tax rate to 6.2% in 2025, adjusting brackets for inflation. These changes affect all residents, employers, and newcomers. Tax returns for 2025 use updated rates with deadlines in 2026. Stay informed to optimize your tax strategy and comply with new requirements.
— By VisaVerge.com