Kiplinger lists S.C. among tax-friendly states for retirees

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South Carolina does not tax Social Security benefits and grants deductions for other retirement income, Kiplinger magazine said in summarizing the state’s tax policy for retirees. Retired military personnel also qualify for deductions.

Staff Report
Published Sept. 7, 2012

Kiplinger magazine has listed South Carolina among the 10 most tax-friendly states for retirees in its September issue.

“The state does not tax Social Security benefits and provides a generous retirement-income deduction when calculating state income tax. State income tax rates are reasonable, and property taxes are very low. Taxes are based on 4% of the market value of the home, and senior homeowners qualify for a homestead exemption,” Kiplinger said in summarizing South Carolina’s tax policy toward people over 65.

Some other points noted by Kiplinger include:

• People 65 and over may deduct up to $10,000 in qualifying retirement income, including public employee retirement plans, Keogh plans, IRA distributions and military retirement.
• People 65 and over can take a senior deduction of $15,000, for single filers, or $30,000, for married couples filing jointly. However, the $15,000 deduction must be offset by the amount taken with the retirement-income deduction.
• Retired military personnel 65 and older can deduct up to $10,000 of military retirement benefits.