Retirees – Lower your individual income tax bill with these 5 tips

The South Carolina Department of Revenue (SCDOR) wants retired South Carolinians and those who are 65 and older to know about tax deductions and exemptions the state offers its older citizens.

Not all of these tax deductions and exemptions apply to every taxpayer. But if you’ve retired or reached age 65, here are 5 South Carolina Individual Income Tax deductions and exemptions you should learn more about:

• ​Military Retirement Income Tax Deduction: In the spirit of Veterans Day, remember – All military retirement pay included as taxable income is exempt from South Carolina Individual Income Tax, no matter the recipient’s age. A surviving spouse receiving military retirement income for their deceased spouse can also claim this deduction.
  •  Take both of these deductions on Line p of your Individual Income Tax return.
• Retirement Income Tax Deduction: An individual taxpayer receiving income from a qualifying retirement account may deduct up to $3,000 of qualifying retirement income annually until reaching age 65, and up to $10,000 annually after reaching age 65.
• Age 65 and Older Income Tax Deduction: Beginning in the tax year a resident taxpayer reaches age 65, they may claim a deduction of $15,000 against any South Carolina income. If you claim the Retirement Deduction or the Military Retirement Deduction mentioned earlier, you must subtract those amounts from this deduction, unless claiming those deductions as a surviving spouse.
  •  Take this deduction on Line q of your Individual Income Tax return.
• Social Security benefits and railroad retirement taxed for federal purposes are exempt from Individual Income Tax in South Carolina.
  •  Enter this amount on Line o of your Individual Income Tax return.
• Retirement income paid by the U.S. government for service in the reserves or National Guard is exempt from Individual Income Tax in South Carolina.
  •  Use the military retirement exclusion worksheet in the SC1040 Instructions to calculate this amount, which is entered as part of your Other subtractions on Line v of your Individual Income Tax return.​
    

If you’re 65 or older and have resided in South Carolina for a full calendar year, here’s a bonus tip to help you save money on your next Property Tax bill.

• ​A Homestead Exemption is an exemption on Property Tax on the first $50,000 in Fair Market Value of your legal residence if you are over age 65, totally and permanently disabled, or legally blind
  •  To learn more, visit dor.sc.gov/lgs/homestead-exemption.
  •  To apply, contact the County Auditor’s Office in your home county.