SC Among Most Tax-Friendly States for Retirees

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 age 65 and over.

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.

Staff Report-Sept. 7, 2012

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