Reminder: Your state tax refund may be lower next year due to withholding adjustments

What you need to know:

• With the Withholding Tax Table updates, less taxes are being withheld from paychecks in 2023, which may result in reduced refunds next year
• For those who owed money on their returns or who received small refunds in 2023, changing withholding can prevent a tax bill in 2024.
• The SCDOR recommends that taxpayers contact their employer’s payroll department to see if they need to adjust their withholding amount.

In 2022, the SC General Assembly voted to reduce the top Income Tax rate if certain General Fund growth tests are met.

As a result of the tax rate cut, the South Carolina Department of Revenue (SCDOR) recently updated the state Withholding Tables. Employers use the Withholding Tables to determine how much South Carolina Income Tax is withheld from workers’ paychecks.

With the table updates, less taxes are being withheld from paychecks in 2023, which may result in reduced refunds next year. For those who owed money on their returns or who received small refunds in 2023, changing withholding can prevent a tax bill in 2024. The SCDOR recommends that taxpayers contact their employer’s payroll department to see if they need to adjust their withholding amount.

Keep in mind:

• The amount of the withholding change in taxpayers’ paychecks depends on a variety of factors, including how much each taxpayer makes and how often they are paid.
• The withholding adjustments only affect South Carolina Individual Income Tax.
• Taxpayers should check their withholding early each year or if they have experienced significant life changes, including:

• • Marriage
  • Divorce
  • The birth of a child
  • A new job or raise
  • New taxable income not subject to withholding
  • Changes in itemized deductions or tax credits

Learn more
For more withholding information, visit dor.sc.gov/withholding.

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