North Carolina vs South Carolina Taxes
North Carolina vs South Carolina Taxes 2026: Complete Comparison
North Carolina and South Carolina—two states, similar names, surprisingly different tax systems. Both are popular retirement and relocation destinations, but which offers better tax treatment?
Quick Comparison
| Tax Category | North Carolina | South Carolina | Winner |
|---|---|---|---|
| Income Tax | 4.5% flat | 0% - 6.5% | ⭐ NC (for most) |
| Sales Tax | 6.75% - 7.5% | 6% - 9% | ⭐ Varies |
| Property Tax | 0.77% | 0.55% | ⭐ SC |
| Retirement Income | Partially taxed | $15K exempt (65+) | ⭐ SC |
| Total Tax Burden | 9.9% | 8.9% | ⭐ SC |
Bottom Line: SC wins for retirees and homeowners. NC wins for high-earning workers. Very close race overall.
Total Federal Tax
$16,712
Effective Tax Rate
16.71%
Your Tax Bracket
22%
Marginal tax rate on next dollar earned
Tax Breakdown by Bracket
2026 Tax Brackets (Single)
Income Tax
North Carolina: 4.5% Flat
Simple flat tax (down from 4.75% in 2025):
- $75K = $3,375
- $100K = $4,500
- $200K = $9,000
Retirement: Social Security exempt, other retirement income taxed
South Carolina: 0% - 6.5%
Progressive brackets:
- 0% on first $3,200
- 3% on $3,200-$16,040
- 4% on $16,040-$19,240
- 5% on $19,240-$22,440
- 6% on $22,440-$25,640
- 6.5% on $25,640+
Examples:
- $75K = $4,325
- $100K = $5,950
- $200K = $12,450
Retirement Deduction (65+): First $15,000 of retirement income exempt
Income Tax Winner
NC wins for earners above $80K
SC wins for retirees and lower earners
Take Standard Deduction
$47,500
Standard deduction of $47,500 exceeds itemized deductions by $22,500
Standard Deduction
$47,500
Itemized Deductions
$25,000
Your total deductible expenses
🎉 NEW 2026 Senior Deduction (OBBBA)
$12,000 additional deduction for taxpayers 65+
Deduction Breakdown
2026 Standard Deduction Amounts
- • Single: $16,100
- • Married Filing Jointly: $32,200
- • Head of Household: $24,150
- • Single: $2,050 per condition
- • Married: $1,650 per person, per condition
- • $6,000 per taxpayer age 65+
- • Phases out at $75K (single) / $150K (married)
- • 6% reduction per dollar over threshold
💡 Optimization Tips
• You're benefiting from the NEW 2026 senior deduction - a valuable OBBBA provision
Property Tax: SC Wins
North Carolina
Average: 0.77%
- $350K home = $2,695/year
South Carolina
Average: 0.55%
- $350K home = $1,925/year
SC Legal Residence: Additional 4% assessment ratio discount (effectively lowers rate further)
SC saves ~$770/year on property tax
Over-Withholding
$15,600
You're giving the IRS an interest-free loan. Expect a refund.
Estimated Tax Owed
$0
Total Withholding
$15,600
Recommended Action
Tax Calculation Breakdown
Payment Schedule
💡 Withholding Tips
• You're over-withholding by $15,600/year. Consider reducing to increase take-home pay
• Submit new W-4 form to your employer to adjust withholding by $600/paycheck
Sales Tax: Close Race
North Carolina
- State: 4.75%
- Average Total: 6.98%
- Range: 6.75% - 7.5%
South Carolina
- State: 6%
- Average Total: 7.43%
- Range: 6% - 9%
Varies by county. Some NC counties lower, some SC counties lower.
Real-World Scenarios
Scenario 1: Working Family (Charlotte vs Greenville)
Income: $140,000
$400K home
2 kids
North Carolina:
- Income: $6,300
- Property: $3,080
- Sales: $2,792
- Total: $12,172
South Carolina:
- Income: $8,750
- Property: $2,200
- Sales: $2,972
- Total: $13,922
NC saves: $1,750/year 🎉
Scenario 2: Retired Couple
Income: $75,000 (retirement)
$350K paid-off home
Ages 68 & 66
North Carolina:
- Income: $3,375
- Property: $2,695
- Sales: $2,094
- Total: $8,164
South Carolina:
- Income: $3,400 (after $15K exemption)
- Property: $1,925
- Sales: $2,229
- Total: $7,554
SC saves: $610/year 🎉
Total Child Tax Credit
$4,400
Refundable Portion
$0
Credit Breakdown
Refundable vs. Non-Refundable Credit
2026 Child Tax Credit Parameters
Credit Amounts
- • Per qualifying child (under 17): $2,200
- • Per other dependent (17+): $500
- • Refundable portion limit: $1,700/child
Phase-Out Thresholds
- • Single: $200,000
- • Married Filing Jointly: $400,000
- • Reduction: $50 per $1,000 over threshold
💡 Optimization Tips
• Your income is well below phase-out threshold - you're receiving full credit
Scenario 3: Young Professional
Income: $85,000
Rents apartment
North Carolina:
- Income: $3,825
- Sales: $2,094
- Total: $5,919
South Carolina:
- Income: $5,025
- Sales: $2,229
- Total: $7,254
NC saves: $1,335/year 🎉
Which State Wins?
North Carolina Better For:
✅ High earners ($80K+)
✅ Young professionals
✅ Growing careers (Research Triangle tech)
✅ Those who rent
✅ College basketball fans (ACC!)
South Carolina Better For:
✅ Retirees (65+ with retirement income)
✅ Homeowners (lower property tax)
✅ Beach lovers (Myrtle Beach, Charleston, Hilton Head)
✅ Lower earners
✅ Those seeking lowest cost of living
Special Considerations
SC Military Retirement: Up to $30,000 of military retirement exempt (in addition to $15K general exemption)
NC vs SC Beaches:
- NC: Outer Banks, Wilmington area (less touristy)
- SC: Myrtle Beach, Charleston, Hilton Head (more developed)
Research Triangle vs Greenville-Spartanburg:
- NC: Raleigh-Durham-Chapel Hill (tech hub, higher salaries)
- SC: Greenville-Spartanburg (growing manufacturing, BMW, etc.)
Property Tax Complexity: SC has complex assessment ratios and exemptions. Effective rate often lower than stated rate.
Your QBI Deduction (Section 199A)
$20,000
20% of your qualified business income
Estimated Tax Savings
$4,800
Based on your marginal tax bracket
QBI Deduction Breakdown
2026 QBI Deduction Parameters
Income Thresholds (2026)
- • Single/HoH: $201,775 threshold
- • Married Joint: $403,500 threshold
- • Phase-in range: $75,000 (single) / $150,000 (married)
Deduction Rules
- • Standard deduction: 20% of QBI
- • Limited to 20% of taxable income
- • W-2 wage limit may apply above threshold
- • SSTB restrictions for high earners
💡 Optimization Strategies
• Your income is below the threshold - no wage or SSTB limitations apply. Focus on maximizing QBI.
FAQ
Q: Which is better for retirees?
SC edges out NC for most retirees due to:
- $15K retirement income exemption (65+)
- Lower property tax
- Lower cost of living
Q: Military retirees?
SC is much better—up to $30K military retirement exempt.
Q: Cost of living?
SC generally 5-10% cheaper than NC. Both affordable compared to national average.
Q: Which has better weather?
SC slightly warmer/milder winters. Both have hot, humid summers. Very similar overall.
Q: Better job market?
NC has stronger job market, especially in Raleigh-Durham (tech) and Charlotte (banking).
Conclusion
For working professionals earning $80K+, NC saves $1,000-2,000/year with its flat income tax.
For retirees and homeowners, SC saves $500-1,500/year with lower property tax and retirement exemptions.
Very close race overall. Your specific situation determines the winner.
Calculate Your Scenario:
Total Federal Tax
$16,712
Effective Tax Rate
16.71%
Your Tax Bracket
22%
Marginal tax rate on next dollar earned
Tax Breakdown by Bracket
2026 Tax Brackets (Single)
Take Standard Deduction
$47,500
Standard deduction of $47,500 exceeds itemized deductions by $22,500
Standard Deduction
$47,500
Itemized Deductions
$25,000
Your total deductible expenses
🎉 NEW 2026 Senior Deduction (OBBBA)
$12,000 additional deduction for taxpayers 65+
Deduction Breakdown
2026 Standard Deduction Amounts
- • Single: $16,100
- • Married Filing Jointly: $32,200
- • Head of Household: $24,150
- • Single: $2,050 per condition
- • Married: $1,650 per person, per condition
- • $6,000 per taxpayer age 65+
- • Phases out at $75K (single) / $150K (married)
- • 6% reduction per dollar over threshold
💡 Optimization Tips
• You're benefiting from the NEW 2026 senior deduction - a valuable OBBBA provision
Your Earned Income Tax Credit
$4,250
Credit being phased out
EITC Credit Breakdown
Income Analysis
2026 EITC Parameters
Maximum Credits (2026)
- • No children: $664
- • 1 child: $4,427
- • 2 children: $7,316
- • 3+ children: $8,231
Key Requirements
- • Must have earned income
- • Investment income limit: $11,950
- • Must file tax return (even if not required)
- • Valid Social Security number required
💡 Optimization Tips
• Your credit is being reduced by $177.378 due to phaseout
• Consider tax-deferred retirement contributions to reduce AGI and increase EITC
AMT Owed
$0
Total Tax Liability
$65,000
AMT Calculation Breakdown
2026 AMT Parameters
- • Single: $90,100
- • Married Joint: $140,200
- • Single: $500,000
- • Married Joint: $1,000,000
- • Phaseout rate: 50% (increased from 25%)
- • 26% on first $244,500
- • 28% on excess over $244,500
Last Updated: Jan 2, 2026
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