Does South Carolina tax my pension if I'm 65?

Partly. South Carolina lets residents 65 and older deduct up to $10,000 a year of qualifying retirement income, and the $15,000 age 65 deduction can cover more, minus what you already deducted, per the SC Department of Revenue.

Is military retirement taxed in South Carolina?

No. The SC Department of Revenue says all military retirement pay, including reserve and National Guard retirement pay, is exempt from South Carolina income tax at any age.

Does South Carolina tax Social Security benefits?

No. Social Security and railroad retirement benefits are exempt from South Carolina income tax, according to the SC Department of Revenue.

What is the South Carolina income tax rate for 2026?

For the 2026 tax year, Act No. 110 (H. 4216) sets 1.99% on taxable income under $30,000 and 5.21% of taxable income minus $966 at $30,000 and above, according to the SC Department of Revenue.

How much is the homestead exemption in South Carolina for seniors?

The first $50,000 of fair market value of a legal residence is exempt for owners 65 and older, and a temporary law adds $25,000 for July 1, 2026, to June 30, 2027, per the SC Department of Revenue. Apply with your county auditor.

Retiring in Myrtle Beach: how SC taxes Social Security, pensions and military pay

South Carolina does not tax Social Security or military retirement pay, and it lets residents 65 and older deduct up to $10,000 of other retirement income a year, according to the South Carolina Department of Revenue (SCDOR). As of Oct. 30, 2026, a new law, Act No. 110 (House Bill 4216), also cuts South Carolina’s income tax for the 2026 tax year to 1.99% on the first $30,000 of taxable income and 5.21% above it, down from a top rate of 6% in 2025. For a retiree moving to Myrtle Beach or anywhere in Horry or Georgetown County, that means most Social Security and military income stays out of the state tax, and pension and IRA income is taxed only after the deductions below.

Does South Carolina tax Social Security?

No. SCDOR’s tips for retirees, published Nov. 12, 2024, say Social Security and railroad retirement benefits that are taxed on your federal return are exempt from South Carolina income tax. You subtract them on line o of the SC1040.

Does South Carolina tax military retirement pay?

No, at any age. SCDOR says all military retirement pay included in federal taxable income is exempt from South Carolina income tax, and a surviving spouse who receives a deceased spouse’s military retirement can claim the same deduction. Retirement pay for service in the reserves or the National Guard is also exempt and is figured on the military retirement exclusion worksheet in the SC1040 instructions.

How does South Carolina tax pensions, 401(k)s and IRAs?

Other retirement income is taxable, but two deductions shrink it. SCDOR lists them this way as of Oct. 30, 2026:

Deduction	Amount	Age	Line on SC1040
Social Security and railroad retirement	All of it	Any age	Line o
Military retirement (including reserves and Guard)	All of it	Any age	Line p (reserves and Guard on line v)
Retirement income deduction (pensions, IRAs, 401(k)s)	Up to $3,000 a year	Under 65	Retirement deduction
Retirement income deduction	Up to $10,000 a year	65 and older	Retirement deduction
Age 65 deduction	$15,000 against any South Carolina income	From the year you turn 65	Line q

The two age-based deductions overlap. SCDOR says that if you claim the retirement income deduction or the military retirement deduction, you subtract those amounts from the $15,000 age 65 deduction, unless you claim them as a surviving spouse. A 66-year-old with a $40,000 pension, for example, can deduct $10,000 as retirement income and the remaining $5,000 of the age 65 deduction, for $15,000 in total.

What are South Carolina’s income tax rates in 2026?

South Carolina’s new rates apply starting with the 2026 tax year, for returns due April 15, 2027. SCDOR’s notice on H. 4216, dated April 15, 2026, says Gov. Henry McMaster signed the bill on March 30, 2026.

Tax year	Rate on taxable income	Source
2025	Top rate 6%	SCDOR legislative update, June 2025
2026	1.99% under $30,000; 5.21% of taxable income minus $966 at $30,000 and above	SCDOR, Act No. 110
2027 and later	Top rate can drop further if state revenue grows at least 5%	Act No. 110

The same law starts the state calculation at federal adjusted gross income and replaces the federal standard deduction with a South Carolina Income Adjusted Deduction (SCIAD): $15,000 for single filers, $22,500 for heads of household and $30,000 for married couples filing jointly, phasing out at higher incomes. SCDOR’s 2026 legislative update says the full amount applies up to federal adjusted gross income of $40,000 for single filers, $60,000 for heads of household and $80,000 for joint filers. The Office of the Governor says the law keeps existing South Carolina-specific deductions.

Do I have to file a South Carolina return if I’m retired?

Many retirees do not. SCDOR’s general information guide for 2025 says residents 65 or older must file only if gross income is more than the federal filing requirement plus $15,000, or plus $30,000 for married couples filing jointly when both are 65 or older, or if South Carolina tax was withheld. Under Act No. 110, a single filer 65 or older must file for 2026 if South Carolina gross income is over $30,000, according to SCDOR’s 2026 update. Returns for 2025 were due April 15, 2026.

What about property taxes on a Myrtle Beach home?

South Carolina gives homeowners 65 and older a homestead exemption on the first $50,000 of a home’s fair market value, and SCDOR’s property tax exemptions page says a temporary law adds $25,000 more for July 1, 2026, to June 30, 2027, for a total of $75,000. You apply with the county auditor after the home is approved for the 4% legal residence assessment ratio. In Horry County, the Auditor’s Office takes homestead questions at (843) 915-5051, at 1301 Second Ave., Suite 1C41, Conway, according to Horry County.

This story is information, not tax, legal or medical advice. For your own return, contact SCDOR at dor.sc.gov or a licensed tax professional.

Retired here already? Tell us what you wish you had known: email the Grand Strand Dispatch at the contact address at the bottom of this page.

More Finance & Taxes guides and local services ›

Live in the Grand Strand? Write for us as a Community Contributor and share what you see in your town.