North Carolina vs South Carolina: Taxes & Take-Home Pay 2026

Why people compare North Carolina and South Carolina

The two Carolinas share the Charlotte metro area, so this comparison is often about a real move of a few miles. Many Charlotte workers live across the line in York or Lancaster County, South Carolina, and the beach and retirement markets around Myrtle Beach and Wilmington compete for the same retirees.

For 2026 the two income taxes look different but end up close. North Carolina has one flat 3.99% rate. South Carolina rewrote its tax in 2026 under Act 110: 1.99% on lower taxable income and 5.21% once taxable income reaches $30,000. South Carolina's deduction also shrinks as income rises, and North Carolina's does not.

Income tax side by side

North Carolina starts from federal adjusted gross income and subtracts its own standard deduction: $12,750 for single filers and $25,500 for married couples. Everything above that is taxed at 3.99%. Withholding runs a little higher than that, at 4.09%.

From 2026, South Carolina also starts from federal AGI but no longer uses the federal standard or itemized deductions. Instead it has the SC Income Adjusted Deduction (SCIAD), worth $15,000 single and $30,000 joint. SCDOR's information letter says the SCIAD shrinks once AGI passes $40,000 for single filers and $80,000 for joint filers, and it is gone at $95,000 and $190,000.

Worked example with the South Carolina phase-out applied

The calculator table above gives South Carolina filers the full SCIAD at every income, so it understates South Carolina tax for middle and higher earners. Here is the exact calculation using the SCDOR phase-out formula.

A single filer with $70,000 of wages gets an SCIAD of $6,820 instead of $15,000. South Carolina tax comes to about $2,326. North Carolina tax on the same wages is $2,284. That is a gap of $41, more in South Carolina.

A married couple earning $140,000 together gets an SCIAD of only $13,640. Their South Carolina tax is about $5,617, against $4,569 in North Carolina, so the couple pays $1,049 more in South Carolina. Once the SCIAD reaches zero, South Carolina's 5.21% top rate applies to almost all income, so North Carolina usually comes out ahead for higher earners.

Retirees: Social Security, pensions and age deductions

Neither Carolina taxes Social Security. Other retirement income is where they differ.

• South Carolina (per the 2025 SC1040 instructions): a retirement deduction of up to $3,000 under age 65, or up to $10,000 from 65, on qualified retirement income from your own plan. There is also a $15,000 age-65 deduction against any income, reduced by the retirement deduction you claim. SCDOR's Act 110 information letter does not list changes to these deductions, but check the 2026 instructions when they are published.
• North Carolina has no general retirement deduction. The Bailey exclusion fully exempts some government pensions, from the North Carolina state and local retirement systems and the federal civil service systems, but only if the retiree had five or more years of creditable service as of August 12, 1989.
• As a result, a retiree in their late 60s with a private pension and IRA withdrawals will usually pay less state tax in South Carolina. A younger worker with a high salary will usually pay less in North Carolina.

Commuting across the state line

North Carolina and South Carolina have no reciprocity agreement. A Fort Mill or Rock Hill resident working in Charlotte owes North Carolina tax on that pay as a nonresident, and the employer withholds North Carolina tax. They also file a South Carolina resident return reporting all income, and South Carolina gives a credit for income tax paid to the other state. In practice you pay at roughly the higher of the two rates on those wages.

It works the same way the other direction. A North Carolina resident working in South Carolina claims North Carolina's credit for income tax paid to another state on Form D-400TC and attaches a copy of the South Carolina return. For South Carolina residents, the SC1040 instructions state that personal service income (W-2 wages) is taxable to South Carolina no matter where it is earned.

Moving between the Carolinas mid-year

In the year you move, you file a part-year return in both states. Each state taxes what you earned while living there, plus any income sourced to it.

• North Carolina: Form D-400 with Schedule PN, which works out the taxable percentage of income that belongs to North Carolina.
• South Carolina: SC1040 with Schedule NR. The SCDOR letter says nonresidents reduce the SCIAD in proportion to the share of federal AGI that is South Carolina AGI.
• Change your state withholding form the day you start work in the new state. Otherwise the old state keeps withholding and you have to recover it at filing time.
• Sales tax and property tax change on your move date, too. South Carolina's 6% state rate is higher than North Carolina's 4.75%, but North Carolina's local add-ons are larger.

Property tax: check the county, not the state

Property tax in both states is set by counties and cities, so the bill depends on the specific address. Before you buy, ask each county assessor for the millage and assessment rules that apply to that parcel.