South Carolina Tax Exemption for Military Retired Pay

South Carolina exempts all military retirement pay from the state's Income Tax, no matter the taxpayer's age. The exemption took effect in tax year 2022, meaning retirees can claim it when they fill out their Income Tax return for this year. This deduction also can be claimed by a surviving spouse receiving military retirement income from their deceased spouse.  

Thrift Savings Plan (TSP) does not withhold taxes for state or local income tax, but it is reported annually on IRS Form 1099-R. All TSP distributions are subject to state taxes and early distributions may incur higher taxes.

Link: South Carolina Military and Veterans Benefits | The Official Army Benefits Website