Is retirement income received from employment outside of SC taxable?
A. Retirement income received by a resident individual is taxable in South Carolina. The residency of a taxpayer when the taxpayer receives the retirement income, not the place of employment where the retirement income was earned, determines the taxability of retirement income. South Carolina does not tax the retirement income of nonresident individuals. See Code Section 12-6-1130. Also, see Code Section 12-6-3500 that provides for a credit over the qualifying taxpayer’s lifetime for other state income taxes paid on the employee’s contributions.
Retirement income received by a resident individual is taxable in South Carolina. The residency of a taxpayer when the taxpayer receives the retirement income, not the place of employment where the retirement income was earned, determines the taxability of retirement income. South Carolina does not tax the retirement income of nonresident individuals.See Code Section 12-6-1130. Also, see Code Section 12-6-3500 that provides for a credit over the qualifying taxpayer’s lifetime for other state income taxes paid on the employee’s contributions. Is there a deduction for retirement income subject to tax in South Carolina? Yes. A taxpayer receiving retirement income may deduct up to $3,000 of qualifying retirement income annually until reaching age 65, and deduct up to $10,000 of such retirement income annually at age 65 and thereafter. For this purpose, “retirement income” means the total of all otherwise taxable income not subject to a penalty for premature distribution from qualified reti
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