South Carolina State Income Tax

South Carolina state income tax is a graduated individual tax, with rates ranging from 0% to 7%. In addition, the Palmetto State levies a 6% state sales tax, and localities can add up to an additional 3%. South Carolina also has some unique ways it helps retirees lower their taxes, such as exempting Social Security and military retirement benefits. It also allows homeowners 65 and older to deduct up to $15,000 of their IRA or 401(k) distributions from state income taxes.

The state taxes ordinary income, which includes all the typical money you earn from your job, investments, and savings accounts. This is different than other types of income, like long-term capital gains or qualified dividends, which are often taxed at a lower rate. In addition, the premiums you pay for employer-sponsored health and life insurance are usually pre-tax, which decreases your taxable income. This is one of the reasons why it’s important to consult a financial professional to navigate the state’s tax laws effectively. They can help you plan ahead for the future and avoid paying unnecessary taxes.

South Carolina State Income Tax Due Dates

Unlike federal due dates, South Carolina’s state income tax filing deadline does not move with the calendar. This means that individuals who make quarterly estimated tax payments will still have to wait until April 15 to file their returns and pay any taxes they owe.

Individual taxpayers are required to submit their returns by April 15 (for calendar year filers) or the 4th day of the 5th month following the end of their taxable year (for fiscal year filers). Taxpayers can avoid late filing penalties by filing an extension by the original due date with Form SC4868. This form cannot be e-filed, so taxpayers who need an extension should mail it to the address on the form.

South Carolina State Income Tax Withholding

South Carolina has its own state payroll tax withholding rules, which differ from the federal government’s. The state also offers a number of deductions and credits to reduce taxpayer liability, including the standard deduction and credit for retirement income. In addition, South Carolina State also offers a tax deduction for some nursing home costs.

In addition to state withholding taxes, employers must also withhold federal taxes from employee paychecks. To ensure compliance, the Department of Revenue requires that businesses submit quarterly returns and make payments electronically. These obligations can be fulfilled using MyDORWAY, an online service offered by the department.

To calculate the biweekly amount of South Carolina State Income Tax Withholding:

1. Begin by determining the total number of allowances an employee claims. This information can be found on the employee’s W-4 form.
2. Apply the annual wages computed in step 2 to the withholding tax tables.
3. Divide the result by 26 to obtain the biweekly withholding amount.
4. Add taxable fringe benefits to obtain the adjusted gross biweekly wage.
5. Multiply the amount of biweekly wages by the number of pay dates in a tax year to obtain the annual wages.