In 2026 your South Carolina withholding is calculated on a tax law that no longer exists
This is not a criticism of your employer, and it is not an error on your stub. H.4216, signed on 30 March 2026, rewrote the state's income tax and applied it retroactively to the whole of tax year 2026. The withholding tables employers are required to use were published before that — they still carry the old structure, topping out at 6.0%. So the tax coming out of your paycheck this year is computed one way, and the tax you actually owe is computed another.
This page shows you the second one: your liability under the law as it now stands. If the figure here is lower than what your stub deducts, that difference is not lost — it comes back at filing. We would rather show you the law than the table.
| Taxable income | Rate |
|---|---|
| $0 to $30,000 | 1.99% |
| Over $30,000 | 5.21% |
Above the first band the state does not simply apply 5.21% to everything: the published formula is 5.21% of taxable income minus a flat $966, which is what keeps the two bands continuous at the $30,000 boundary. Same brackets for every filing status — South Carolina does not widen them for married couples.
A deduction that fades out instead of stopping
The state deduction is $15,000 filing single, $22,500 as head of household and $30,000 jointly — but it does not simply switch off above an income limit. It shrinks in a straight line across a band of federal adjusted gross income, reaching zero at the top of that band:
- Single or married filing separately — starts shrinking at $40,000, gone by $95,000.
- Head of household — from $60,000 to $142,500.
- Married filing jointly — from $80,000 to $190,000.
The distinction matters because a cliff and a taper behave differently at the margin: earning one dollar more never costs you the whole deduction here, it costs you a small slice of it. Note also that the test is on your federal adjusted gross income, not your South Carolina taxable income.
What your employer is actually subtracting
South Carolina withholding runs on its own certificate, Form SC W-4, and its own arithmetic: $5,000 for each allowance you claim, plus a standard deduction worth 10% of your gross wages, capped at $7,500. Neither applies if you claim zero allowances — a detail worth checking if your withholding looks unexpectedly high.
One more change already scheduled: from 2027 the state's rates fall automatically whenever revenue is projected to grow by 5% or more. We re-check this page against the official documents on a fixed cycle, and every change is listed in the changelog.