Withholding Taxes: South Carolina

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• If a South Carolina resident is sent to work in a state that has an income tax, the South Carolina employer can withhold either South Carolina income tax, or the other state's income tax, but not both. Nonresidents working in South Carolina are subject to South Carolina income tax withholding. See Withholding on Residents, Nonresidents and Expatriates.
• Form SC W-4, Employee's Withholding Allowance Certificate, is used to determine employees' state income tax withholding in conjunction with federal Form W-4. In certain situations, employers must send copies of the forms to the state Department of Revenue. Nonresident spouses of military servicemembers may be exempt from state income tax withholding. See Employee Withholding Forms.
• Withholding on supplemental wages, such as bonuses, is calculated differently depending on whether they are paid together with, or separate from, regular wages. See Supplemental Wages.
• South Carolina employers must provide each employee with a copy of Form W-2, Wage and Tax Statement, annually by January 31. See Form W-2 Requirements.
• Federal income tax recordkeeping requirements are followed in South Carolina for state income tax purposes. See Recordkeeping Requirements.