SC Veterans Will No Longer Pay State Income Tax on Military Retirement Benefits

On May 13, 2022, South Carolina Governor Henry McMaster signed bill H. 3247 into law, exempting military retirement benefits from state income tax. With this new bill, South Carolina joins 35 other states that provide full state tax exemptions on military retirement benefits.

McMaster said the following in a statement:

“We’re doing everything we can to incentivize our nation’s heroic veterans to live, work, and raise their families here in S.C. For years, we have fought to eliminate all state income taxes on their retirement pay. On Friday, I 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.”

According to the South Carolina Department of Veterans’ Affairs, the law will go into effect for all tax years after 2021. The new law will make military retiree pay 100% exempt from state income tax with no earned-income cap. Prior to the passage of the bill, the previous policy only provided tax exemptions on those benefits if the individual had served at least 20 years.

If think your South Carolina income tax status may be affected by the changes in H. 3247, and you would like help maximizing your net income, contact Burkett Burkett & Burkett Certified Public Accountants, P.A. today and gain the benefits of our tax expertise.