ALL retired military veterans in South Carolina have been exempted from their state income taxes.
A newly passed law exempted all military retirement income from South Carolina income taxes.
At the state level, the bill passed both the House and Senate before Gov. Henry McMaster announced it on March 29.
According to the South Carolina Department of Veterans’ Affairs, out of South Carolina’s 400,000 military veterans, approximately 63,000 retirees will benefit from this law.
It can be an incentive for veterans to relocate to their state.
Rep. Bobby Cox, co-sponsor of the bill, told News19: “35 states do not currently tax the military [retirement] Income.”
“South Carolina will be part of that group and recruit some of these great work skills that we want to have in our veterans,” Mr. Cox said.
Other states with military retirement exemptions
Typically, veterans must serve 20 years to be eligible for military retirement benefits.
Because the military pension does not count as earned income, no Social Security is withheld.
However, the laws vary from state to state.
Some states have no state income tax, while others exempt military retirement income from state taxes.
There are also states that offer special tax treatments for military pensions and some states that treat military pensions as ordinary taxable income.
Some states tax up to a certain amount or allow veterans to be exempt based on age or year of retirement.
In Arizona, up to $2,500 in military pensions may be exempt from taxable income.
Additionally, military pensions in Kentucky are completely exempt if a veteran retired before 1997.
There are only four states that do not offer tax exemptions for military retirement pensions: California, Vermont, Virginia and Washington, DC
According to Military Wallet, the following states have a state income tax but are exempt from military pensions:
- Indiana – Military pension payments are tax-exempt effective January 1, 2022
- Nebraska – Effective January 1, 2022, military retirement pay will be tax-free
- New Jersey
- new York
- North Carolina
- North Dakota
- West Virginia
These nine states have no state income tax and therefore do not tax military pension payments: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
Meanwhile, the following 16 states are offering partial exemptions for military retirement:
- New Mexico
- Rhode Island
- South Carolina
Plus are nine banks offer $1,500 in summer rewards.
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https://www.the-sun.com/money/5324138/americans-closer-avoiding-income-taxes/ More than 60,000 Americans no longer have to pay state income taxes — your job could mean you’re exempt