A New Bill Exempts SC Veterans From Paying State Taxes On Their Military Pension

Governor Henry McMaster has signed the bill H.3247, the Workforce Enhancement and Military Recognition Act, that provides a full income tax exemption for veterans’ military retirement pay. 

South Carolina veterans who have retired will no longer be subject to state taxes on their military pension beginning with the 2022 tax year.

The General Assembly has been urged to abolish all state taxes on these benefits for more than ten years by some legislators, particularly those with installations in their districts. This year, the House of Representatives and the Senate unanimously passed a bill that accomplishes this objective.

Previously, the state provided a partial tax exemption on veterans’ military retirement income, which they are entitled to if they have served for at least 20 years.

The new bill states that the deduction cannot be greater than $30,000, although the maximum deduction increases until 2027. Veterans just need to show on their tax returns that they are retired from the military after 20 years of service.

South Carolina joins 35 other states in providing a full tax exemption on these benefits.

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