Why am I receiving a $10,000 Retirement Income Deduction on my SC tax return but my wife is not? FYI - I have no military service.

[Ashby · Accepted solution]

Is there a deduction for retirement income subject to tax in South Carolina?

Yes. A taxpayer receiving retirement income may deduct up to $3,000 of qualifying retirement income annually until reaching age 65, and deduct up to $10,000 of such retirement income annually at age 65 and thereafter. For this purpose, "retirement income" means the total of all otherwise taxable income not subject to a penalty for premature distribution from qualified retirement plans and public employee retirement plans of the federal, state, and local governments, including military retirement.

Further, if both spouses receive retirement income, each spouse is entitled to a retirement income deduction. In addition, a surviving spouse is allowed a deduction for income received from his or her retirement plan, if any, and a second, separate deduction for retirement income that is attributable to the deceased spouse, if any. The deduction for retirement income received as a surviving spouse is based on the age the deceased spouse would have been had he or she lived.