That matters because the rules changed. A 2026 law (H.4216, Act 110) replaced the old rate structure and the starting income figure. This guide covers the 2026 rates, how to calculate your tax, how paycheck withholding differs, and what to check before you file.
Key Takeaways
- SC1040TT calculates annual tax; employer withholding tables are a separate document.
- 2026 rates are 1.99% below $30,000 of taxable income and 5.21% minus $966 above it.
- Federal AGI is the 2026 starting point, not federal taxable income.
- Withholding is an estimate and can differ from your final refund or balance due.
2026 South Carolina Income Tax Rates and Brackets
What the SC1040TT Covers
The SC1040TT is a lookup table for the annual return. Its columns read "At least," "But less than," and "Your tax is." You find your South Carolina taxable income, read across, and get your tax. It is not a rate chart and not a paycheck calculator.
The 2025 table covers income below $100,000. At $100,000 or more, you use the rate schedule printed beneath it. That schedule applies to any filing status claimed on the SC1040.
Don't use the 2025 table for a 2026 return. Wait for the 2026 version or calculate with the schedule below.
2026 Rates and Income Ranges
Act 110, approved March 30, 2026, applies to tax years after 2025. SCDOR Information Letter 26-20 (August 31, 2026) summarizes the schedule:
| South Carolina taxable income | Annual tax |
|---|---|
| Less than $30,000 | Taxable income × 1.99% |
| $30,000 or more | Taxable income × 5.21%, minus $966 |
There's one rate schedule for all filing statuses. Filing status still matters through the standard deduction, covered below.
How Marginal Rates Apply
The $966 subtraction does the work of a bracket. At exactly $30,000, both formulas give $597, so there's no jump at the threshold. Higher rates don't hit your gross income.
Hypothetical example, using the schedule above:
- Taxable income of $20,000: $20,000 × 1.99% = $398
- Taxable income of $50,000: $50,000 × 5.21% = $2,605, minus $966 = $1,639
For reference, the official 2025 example in the 2025 SC1040TT shows $101,000 × 6% minus $642 = $5,418. That is a 2025 calculation, not 2026.
Why the Rates Changed
Recent years brought a series of cuts:
- 2022: Act 228 set a 6.5% top rate with conditional reductions.
- 2025: The budget (H.4025) set a 6.0% top rate for tax year 2025.
- 2026: Act 110 created the two-rate schedule, effective on approval and first applicable to tax years after 2025.
So the 2026 rates apply to the return you file in 2027 for calendar year 2026.
How to Calculate South Carolina Tax Using the SC1040TT
Step 1: Identify the Correct Income Figure
Gross wages on your W-2 are not the number to use. For 2026, South Carolina starts with federal adjusted gross income (AGI), then applies state adjustments and the state deduction. Earlier years started with federal taxable income, so older guides are out of date.
South Carolina also decouples from federal Section 63(b)-(g). That excludes the federal standard or itemized deduction and several newer federal deductions (senior, tips, overtime, car-loan interest, qualified business income).
Step 2: Apply Additions and Subtractions
State adjustments can move your starting figure. Common ones on the latest (2025) SC1040:
- Additions: state income tax deducted when itemizing, out-of-state losses, interest on non-SC state and local obligations.
- Subtractions: U.S. government interest, Social Security benefits included in the federal figure, and retirement deductions.
2026 line numbers may differ from prior years. Use the official 2026 SC1040 instructions when they are released.
Step 3: Apply the Deduction, Exemptions, and Credits
For 2026 the South Carolina Income Adjusted Deduction (SCIAD) replaces the federal deduction. It phases out as AGI rises:
| Filing status | Maximum | Full amount through AGI | Zero at AGI |
|---|---|---|---|
| Single / Married Filing Separately | $15,000 | $40,000 | $95,000 |
| Head of Household | $22,500 | $60,000 | $142,500 |
| Married Filing Jointly / Surviving Spouse | $30,000 | $80,000 | $190,000 |
The reduction is proportional within each range and rounds down to the next $10. SCIAD lowers taxable income; credits lower the tax itself.
Common credits include:
- Other-state tax credit (use tax owed to the other state, not W-2 withholding)
- 2026 earned income credit at 125% of the federal EITC, capped at $200 and nonrefundable
Gather these records:
- W-2s and 1099s
- Your federal return
- Retirement distribution statements
- Dependent details
- Other-state tax returns
Step 4: Use the Table and Reconcile Payments
Find your taxable income range, read the tax, then subtract withholding, estimated payments, and refundable credits. The result is a refund or balance due. It will not necessarily match what your employer withheld.
Special Situations
- Part-year residents can report all income as if resident all year, or file with Schedule NR and report income earned while resident plus South Carolina-source income.
- Nonresidents file the SC1040 with Schedule NR for South Carolina income and prorate deductions. Nonresidents prorate SCIAD by SC AGI divided by federal AGI.
- Remote workers are covered by Revenue Ruling 22-3: South Carolina residents working in the state owe withholding regardless of employer location. A nonresident working entirely outside the state for a South Carolina employer is not subject to it.
Not all income is taxable in South Carolina. Check the Schedule NR instructions.
Deductions, Exemptions, and Guidelines That Can Change 2026 Tax
Federal Conformity
South Carolina's Internal Revenue Code reference date currently runs through December 31, 2024. Combined with the Section 63(b)-(g) exclusion, federal changes since then may need a state adjustment. Check the current instructions.
Dependents
South Carolina allows an annual inflation-adjusted dependent exemption. The $4,930 figure is the 2025 amount; confirm the 2026 amount in the latest SC1040 instructions. An additional deduction equals the exemption for each dependent under age six. Keep Social Security numbers and proof of relationship.
Don't confuse this with payroll allowances. The $5,000 per-allowance figure on withholding forms does not set your annual exemption.
Retirement, Social Security, and Military Income
- Social Security is excluded from South Carolina income.
- Qualified retirement deduction: up to $3,000 before age 65, up to $10,000 from the year you turn 65.
- Age 65+ deduction: up to $15,000 per eligible taxpayer, reduced by retirement deductions taken.
- Military retirement income is deductible, and it reduces the other retirement deductions available.
Exempt income, such as Social Security, can't be deducted twice.
Filing Status and Other Rules
The rate schedule is the same for every status. The SCIAD amount and phaseouts differ. Married couples, older taxpayers, the self-employed, and multistate earners should check the schedules that apply.
Compare this guide with the latest SC1040 instructions and SCDOR notices before filing. Tax treatment depends on your facts. For final decisions, rely on official SCDOR guidance or a qualified tax professional.
SC1040 Tax Table vs. South Carolina Withholding Tables
Annual Liability vs. Paycheck Withholding
The two tools answer different questions:
| Annual 2026 liability | 2026 withholding | |
|---|---|---|
| Purpose | Calculate yearly tax | Collect through paychecks |
| Starting measure | Federal AGI plus SC adjustments | Annualized wages |
| Rates | 1.99% / 5.21% | 0% / 3% / 6% formula |
SCDOR's WH-1603 tables (revised 10/30/25) are for payroll. Employers use them starting January 1, 2026, with the employee's SC W-4 (revised 12/5/25).
The 2026 WH-1603F formula annualizes pay, subtracts $5,000 per allowance, and applies a standard deduction of 10% of gross wages, capped at $7,500, if you claim one or more allowances.
Official example: $750 weekly × 52 = $39,000. Three allowances remove $15,000, the standard deduction is $3,900, leaving $20,100 taxable. The result is $10.58 per week.
What Affects Your Paycheck
- Gross pay and pay frequency
- Allowances on SC W-4 line 5
- Extra dollars withheld on line 6
- Changes in personal circumstances
State withholding is separate from federal withholding, Social Security, and Medicare.
When to Review Withholding
File a new SC W-4 after marriage, divorce, a new job, a raise, a new dependent, or added taxable income. Review it each year as well.
VJM Global prepares Form 1040 and 1040-NR returns for US individual taxpayers and supports tax compliance and payroll for employers and individuals in multistate situations.
How to Use the 2026 SC1040TT When Filing and Avoid Common Mistakes
Filing Preparation Checklist
Before you look up the table:
- Gather your federal return, W-2s, 1099s, and withholding records.
- Collect estimated-payment confirmations and dependent details.
- Confirm residency status, filing status, and income sources.
- Check whether you need Schedule NR or other schedules.
Common Mistakes
- Applying the top rate to all income
- Entering gross wages instead of South Carolina taxable income
- Using 2025 thresholds or the 2025 table for 2026
- Starting from federal taxable income instead of federal AGI
- Treating the SC1040TT as a paycheck calculator
A pay stub shows only estimated withholding. Your actual result depends on the full return.
Final Verification and Filing Steps
- Deadline: The 2026 return is due April 15, 2027.
- Extensions: A six-month filing extension is available, but it does not extend the time to pay.
- Payment: MyDORWAY accepts ACH debit and credit cards, including scheduled payments.
- Amendments: File a corrected SC1040, check "Amended Return," and attach Schedule AMD. Don't use the SC1040X.
- Records: Keep the return, worksheets, and supporting documents for three years from the filing date or the due date, whichever is later.
One caution: the 2026 SC1040ES, revised 10/13/25, still prints the older 0% / 3% / 6% schedule. Don't rely on it for annual rates.
Verify the latest SCDOR documents before filing, and seek professional advice for complex multistate, business, retirement, or nonresident situations.
Frequently Asked Questions
What are the South Carolina state tax tables for 2026?
The official 2026 SC1040TT isn't published yet; SCDOR expects 2026 forms after January 1, 2027. It will list tax by taxable-income range. Check dor.sc.gov for the latest version.
How are South Carolina income taxes calculated?
Start with federal AGI, apply South Carolina additions and subtractions, subtract SCIAD and other deductions, then compute tax on the result. Subtract credits and payments to find your refund or balance due.
How much does South Carolina tax your paycheck?
It depends on wages, pay frequency, SC W-4 allowances, and any extra withholding. The amount is an estimate and may differ from your final annual liability.
What is the difference between the SC1040 tax table and the 2026 withholding tables?
The SC1040TT calculates annual tax on your return. The WH-1603 withholding tables help employers calculate paycheck withholding using your SC W-4.
Does South Carolina use the same income tax brackets for all filing statuses?
Yes. The 2026 schedule (1.99% under $30,000, 5.21% minus $966 above) is the same for all statuses. The SCIAD deduction does vary by filing status.
