From 24/7 Wall St. · Vilma Rios · · 1m 20s
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%.
In brief
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 yearly on 401(k) withdrawals compared to North Carolina after age 65. Originally reported by 24/7 Wall St..
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.
At a glance
Retirees in South Carolina save over $1,000 yearly on 401(k) withdrawals compared to North Carolina after age 65.
