South Carolina veteran taxes

Military retired pay in South Carolina

Exempttax year 2025Sources 1, 2

Beginning with tax year 2022 South Carolina lets individuals deduct all military retirement income included in South Carolina taxable income, with no cap, age or income test (S.C. Code § 12-6-1171; 2025 SC1040 instructions, lines p-4 through p-6). The general retirement deduction and the age 65 and older deduction are reduced by the military retirement deduction taken.

Survivor Benefit Plan annuities

ExemptSources 3, 4

The deduction covers taxable income the taxpayer’s surviving spouse receives from a qualified military retirement plan, and for a surviving spouse military retirement income also includes a retirement benefit plan and dependent indemnity compensation related to the deceased spouse’s military service (S.C. Code § 12-6-1171(B); 2025 SC1040 instructions, line p-6). The statute and the instructions do not name the Survivor Benefit Plan and speak only of a surviving spouse.

Property tax relief for disabled veterans

Exemption or creditSources 5, 6, 7

South Carolina exempts from property tax the house (the dwelling and the lot classified as the owner’s legal residence) owned in fee or jointly with a spouse by a veteran of the U.S. Armed Forces who is permanently and totally disabled as a result of a service-connected disability and files with the Department of Revenue a certificate signed by the county service officer (S.C. Code § 12-37-220(B)(1)). The Department of Revenue describes the exemption as covering a home and land up to five acres.

• Under a 2024 change, the exemption can be claimed beginning with the year in which the disability occurs; the Department of Revenue says a claim can reach back at most the previous two years, if the property tax was paid on time.
• Veterans apply to the Department of Revenue, which points to its online MyDORWAY portal.

Vehicle registration for disabled veterans

Fee waiver or discountSources 8, 9, 10, 11

South Carolina issues Disabled Veteran license plates (also Disabled Female Veteran and wheelchair versions) for passenger vehicles and motorcycles registered to veterans considered totally and permanently disabled due to a service-connected disability; the plates are exempt from the regular motor vehicle registration fee, no more than three may be issued, and they are renewed every two years (S.C. Code § 56-3-14940). The SCDMV application (Form MV-37, 02/2026) lists the registration fee as free and also accepts a letter showing the loss of or use of a leg, arm, or vision.

• Up to two private passenger vehicles owned or leased by a totally and permanently disabled veteran (or by the spouse living with the veteran at the same registered address) are exempt from property tax; the surviving spouse keeps the exemption on one vehicle for life or until remarriage (S.C. Code § 12-37-220(B)(3)).
• The Disabled Veteran plate does not give handicap-parking privileges; the wheelchair versions require Form RG-007A signed by a licensed physician.