Does South Carolina Tax Social Security?
No. South Carolina doesn’t tax Social Security, it takes up to $15,000 a year off other income at 65, and it gives homeowners 65 and over a break on property tax.
South Carolina Income Tax on Retirement Income
Not taxed
South Carolina doesn’t tax Social Security or Railroad Retirement benefits, at any age or income.
Up to $10,000 off at 65
Each person 65 or older can deduct up to $10,000 of retirement income a year. Under 65, the deduction is up to $3,000.
Up to $15,000 off any income
From the year you turn 65, you can deduct up to $15,000 of any South Carolina income, less whatever retirement deduction you took. A married couple both over 65 can each take it.
Fully deductible
Military retirement pay can be deducted in full on a South Carolina return.
South Carolina Income Tax Rates for 2026
From tax year 2026, South Carolina has two income tax rates: 1.99% on taxable income under $30,000 and 5.21% at $30,000 and over, down from a top rate of 6%. The brackets rise with inflation each year, and the top rate can drop further from 2027 if state revenue grows. With Social Security left out and the age-65 deductions taken off, many retirees owe little or no state income tax.
Property Taxes for Retirees
A home you live in as your legal residence is assessed at 4% of its value instead of 6%, and it doesn’t pay the school operating part of the tax bill, so it costs far less to own than a second home. You apply once to the Beaufort County Assessor. See Beaufort County property taxes.
At 65, the South Carolina homestead exemption also takes the first $50,000 of your home’s value off the tax rolls, once you’ve lived in the state for a full calendar year.
Sales, Car and Estate Taxes
The state sales tax is 6%, and groceries carry no state sales tax. Cars, boats and golf carts pay a yearly property tax to the county, billed with the registration. South Carolina has no estate tax and no inheritance tax. Day-to-day costs are on the cost of living on Hilton Head.
Retiring to Hilton Head: What to Do First
Make it your legal residence
Get a South Carolina driver’s license and car registration, then file for the 4% rate on your home. The homestead exemption follows once you’ve lived here a full calendar year. Still choosing a town? See the best places to retire in South Carolina.
Sort out Medicare
If your plan doesn’t cover Beaufort County, you have a window to switch. See Medicare on Hilton Head.
Claim the deductions
The retirement and age-65 deductions go on your South Carolina return. A local CPA can check which one works out better for you.
Frequently Asked Questions
Updated
Does South Carolina tax Social Security?
No. South Carolina doesn’t tax Social Security or Railroad Retirement benefits.
Does South Carolina tax pensions and IRA withdrawals?
Yes, but with deductions. Each person 65 or older can deduct up to $10,000 of retirement income a year, or up to $3,000 under 65. There is also an age-65 deduction of up to $15,000 against any income, less the retirement deduction.
What is the South Carolina income tax rate in 2026?
1.99% on taxable income under $30,000 and 5.21% at $30,000 and over, starting with tax year 2026.
Is military retirement taxed in South Carolina?
No. Military retirement pay can be deducted in full on a South Carolina return.
Do seniors get a property tax break in South Carolina?
Yes. Homeowners 65 and over who have lived in South Carolina for a full calendar year can claim the homestead exemption, which takes the first $50,000 of the home’s value off the tax rolls. Any owner living in the home also gets the 4% legal-residence rate.
Does South Carolina have an estate or inheritance tax?
No. South Carolina has neither.
Keep exploring
Golf cart insurance in South Carolina: the liability cover the law requires, the $5 SCDMV permit and registration, and where a permitted cart can drive.
The South Carolina homestead exemption takes the first $50,000 of your home's value off property tax at 65. Who qualifies and how to apply here.
Medicare supplement plans in South Carolina: the lettered Medigap plans, when to buy without health questions, the under-65 state pool and SELECT plans.
Moving to Hilton Head Island: pros and cons, home prices, taxes for retirees, hurricanes, health care, where people live and Hilton Head vs Bluffton.
Get the Hilton Head turning-65 checklist
The dates that matter, the choices to make at 65, and what changes if you’re moving here. Free, by email, in plain English.
Want to talk it through with someone?
South Carolina’s Medicare counselors, called I-CARE, give free one-on-one help and don’t sell insurance.
Call I-CARE · 1-800-868-9095