States / South Carolina
SC state income tax · checked October 14, 2026
Does South Carolina tax tips and overtime?
Yes. South Carolina taxes tips and overtime in full; the federal deductions don’t carry over to the South Carolina return.
| South Carolina return | Tips | Overtime |
|---|---|---|
| 2025 | Taxed | Taxed |
| 2026 | Taxed | Taxed |
The details
South Carolina did not adopt the federal deductions; SCDOR Information Letter 26-4 says taxpayers who claim them federally add them back on the SC1040.
The federal deductions are taken after adjusted gross income, on Schedule 1-A, so a state that starts from federal AGI or computes its own income doesn’t pick them up unless its legislature adds a matching subtraction. We found no South Carolina law doing that for 2025 or 2026 as of October 2026.
The federal deductions apply either way. See who qualifies for no tax on tips, how the overtime deduction works, and where both go on Schedule 1-A.
States with the same 2026 treatment
All 50 states and D.C. · Rhode Island · South Dakota
Questions
Does South Carolina tax tips in 2026?
For 2026, South Carolina taxes tips in full.
Does South Carolina tax overtime in 2026?
For 2026, South Carolina taxes overtime in full.
What about my 2025 South Carolina return?
For 2025, South Carolina taxes tips in full. For 2025, South Carolina taxes overtime in full.
Does the federal deduction still apply?
Yes. Whatever your state does, you can still claim the federal deductions on Schedule 1-A if you qualify: up to $25,000 of qualified tips per return and up to $12,500 of qualified overtime ($25,000 joint), phasing down above $150,000 of MAGI ($300,000 joint).