South Carolina replaces its income tax schedule and drops the federal deduction
Act 110 cuts the top rate from 6.2% to 5.21%, adds a 1.99% first band, and swaps the federal standard deduction for a new SCIAD that phases out between $40,000 and $95,000.
H.4216 was ratified on March 25, 2026, and approved on March 30, 2026 as Act 110, applying to tax years beginning after 2025. Tax year 2026 is the first year under it.
The rate schedule is now 1.99% on taxable income under $30,000 and 5.21% minus $966 at $30,000 and above — a subtraction that makes the two bands join seamlessly at $597. The old top rate of 6.2% is gone.
The larger change is structural. Section 12-6-50 was amended to specifically not adopt the federal standard and itemized deductions, so South Carolina taxable income now begins from federal adjusted gross income. In their place is the South Carolina Income Adjusted Deduction: $15,000 single, $22,500 head of household, $30,000 joint.
The SCIAD is withdrawn as income rises — by three elevenths of a dollar per dollar of AGI above $40,000 single or $80,000 joint, reaching nil at $95,000 and $190,000. That gives South Carolina a real marginal rate of about 6.62% across the middle of the income range, higher than the top rate it just repealed, before it falls back to 5.21% once the deduction is exhausted.
From 2027 the top rate falls further whenever income tax revenue is projected to grow 5% or more, continuing until the whole tax reaches zero.