An IRS 1040 form, U.S. Individual Income Tax Return for 2017. (Associated Press)
COLUMBIA, S.C. (WCBD)- According to the U.S. Census, nearly 19% of South Carolina residents are over the age of 65, and state officials want them to know of a few financial perks that accompany retirement.
The South Carolina Department of Revenue is offering tax tips that can help older South Carolinians keep more money in their pockets.
Residents who are 65 years or older at the end of 2021 do not need to file an individual tax return under the following circumstances:
*Note: Based on federal gross income filing requirement
- If filing status is single and their gross income is less than $14,250
- If filing as a qualifying widow or widower and their gross income is less than $26,450
- If filing as the head of household and their gross income is less than $20,500
- If married and filing jointly and have a combined spousal income of less than $27,800
However, if a resident over 65 years old does need to file an individual income tax return, they are eligible for a tax deduction of up to $15,000 against any South Carolina taxable income. It is also possible for individual taxpayers over 65 years old that receive income from their own retirement plans to deduct up to $10,000 of such income annually.
The two above-mentioned deductions can be combined, but the total cannot exceed $15,000 per taxpayer.
Social security benefits and investments are the main sources of income for many retirees and are eligible for some deductions in South Carolina, as well.
Although taxed at the federal level, social security benefits and certain interest payments such as U.S. savings bonds, treasury notes, and bills are not subject to tax in South Carolina.
Investment income, on the other hand, including traditional IRAs, 401(k), 403(b), and many pension distributions are taxed at both the federal and state level.
In addition to deductions, some South Carolina seniors are eligible for reductions on property taxes and sales taxes:
- Individuals who are 65 years or older, legally blind, or permanently and totally disabled, and have resided in South Carolina as their permanent home for a full calendar year are eligible for a Homestead Exemption of $50,000 from the value of your home
- Individuals 85 years and older are allowed a 1% lower state sales tax rate for personal purchases as defined by state revenue rulings.
For more information on South Carolina Individual Income Tax deduction eligibility for seniors, visit dor.sc.gov/iit.