From staff reports
Governor Henry McMaster signed H. 3247 into law on Friday, May 13, making South Carolina one of more than three dozen states that exempt military retiree pay from taxation.
The law is effective beginning tax years after 2021, making military retiree pay 100% exempt from state income tax with no earned-income cap. Prior to the passage of the bill, a portion of a military retiree’s income was taxed with only partial exemptions in place.
The legislation should incentivize service members transitioning from active duty to retirement to live, work, or consider relocating to South Carolina.
“We’re doing everything we can to incentivize our nation’s heroic veterans to live, work, and raise their families here in S.C.,” McMaster said in a release. “For years, we have fought to eliminate all state income taxes on their retirement pay. I’m proud to have finally signed a bill into law that will make that a reality. This is just one more way we can thank our Veterans for their sacrifice, and it adds to the long list of things that makes South Carolina the most military-friendly state in the country.”
