Is social security disability considered permanent disability retirement income for South Carolina taxes

[ToddL · Accepted solution]

Unfortunately, Social security disability is not considered permanent disability retirement income for South Carolina tax purposes. 

This SC subtraction is limited to payments received from retirement plans, and Social Security is not a "retirement plan."

From the 2016 Instructions - South Carolina Form SC1040:

"If disability retirement income was taxed on your federal income tax return and you are totally and permanently disabled, you may be able to deduct this income from your South Carolina taxable income.

You must be totally and permanently disabled, unable to be substantially gainfully employed, receiving income from a disability retirement plan, and eligible for the homestead exemption under SC Code Section 12-37-250. You must attach a copy of the physician's statement establishing that you are permanently and totally disabled.

NOTE: The deduction is limited to payments received from retirement plans."