# South Carolina Tax Break for Retirees

> South Carolina exempts $15,000 of 401(k) withdrawals after 65, while North Carolina taxes every dollar at 3.99%.
- Title: South Carolina Tax Break for Retirees · 24/7 Wall St.
- Summary: South Carolina exempts $15,000 of 401(k) withdrawals after 65, while North Carolina taxes every dollar at 3.99%. Retirees in South Carolina save over $1,000…
- Keywords: south carolina, north carolina, 401k, social security, retirees, tax breaks, state taxes, income tax, South, Carolina, Tax, Break
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/10/20/south-carolina-doesnt-tax-social-security-and-exempts-the-first-15000-of-a-retirees-401k-withdrawals-after-65-north-carolina-taxes-every-dollar-of-the-same-withdrawal-at-3-99-and-the-two-sta
- Author: Vilma Rios
- Published: 2026-10-20T14:00:03+00:00
- Read time: 1 min
- Topics: south carolina, north carolina, 401k, social security, retirees, tax breaks, state taxes, income tax
## South Carolina Tax Break for Retirees
South Carolina exempts the first $15,000 of a retiree's 401(k) withdrawals after 65.
## North Carolina Tax Rate
North Carolina taxes every dollar of the same 401(k) withdrawal at 3.99%.
## State Border and Tax Difference
North Carolina and South Carolina share a 335-mile border with different tax treatments for retirees.
## South Carolina's Senior Deductions
South Carolina combines two senior breaks: $10,000 retirement income deduction and $15,000 age 65 deduction.
## North Carolina's Flat Tax Rate
North Carolina uses a flat 3.99% individual rate for 2026 with no age-based retirement deduction.
## Tax Savings Example
A $50,000 withdrawal costs $1,137 less in South Carolina than North Carolina for a single retiree.
## Break-Even Point
Retirees face a $1,553 annual savings in South Carolina for joint withdrawals up to $143,238.
## State Tax Rate Changes
South Carolina's top rate drops to 5.21% if state economists project revenue growth of 5% or more.
## Moving Between States
Retirees should time their move to avoid filing part-year returns in both states.
## Key takeaway

Retirees in South Carolina save over $1,000 yearly on 401(k) withdrawals compared to North Carolina after age 65.