Does South Carolina tax pensions and retirement income?
Taxed, with a retirement exclusion
Partly. South Carolina taxes pension income, but you can deduct up to $3,000 of retirement income a year before 65 and up to $10,000 from 65. All military retirement income is deductible.
In the state's own words
Copied word for word from the official document linked below each quote:
“Pension income received while a resident of South Carolina is taxable to South Carolina.”
“ceiving retirement income from their own plan may deduct up to $3,000 of qualifying retirement income annually until reaching age 65 and deduct up to $10,000 of such retirement income annually at age 65 and thereafter.”
And Social Security?
No. Social Security taxed on your federal return is not taxed by South Carolina. The South Carolina Social Security page quotes the rule.
Federal tax still applies
Whatever South Carolina does, pensions, annuities and traditional IRA or 401(k) withdrawals are generally taxable on your federal return. See the federal tax brackets and, if you are 73 or older, the required minimum distribution calculator.
State rules change, and the details (age limits, income limits, which plans qualify) matter. Check with the South Carolina Department of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- Individual Income Tax FAQsSouth Carolina Department of Revenue. Read on November 12, 2026.