The tax is required to be paid in South Carolina (SC) where the money was earned, if you have taxable income for the year. The idea behind this credit for North Carolina (NC) is explained below under "Resident State".
Filing requirements for nonresidents working in SC: A nonresident individual must file if the gross income taxable to South Carolina is more than the federal personal exemption amount ($4,050 for 2017). A nonresident individual files a Form SC1040 South Carolina Individual Income Tax Return and Schedule NR Nonresident Schedule.
Resident State: All income worldwide is required to be
reported on your resident state return. Any money that is also taxed in a
nonresident state is eligible for the "credit for taxes paid to another state" when you complete your resident state return.
Your resident state does not want you to pay tax twice on the same
income.
Nonresident
State: Any money earned in a
nonresident state is required to be reported on that state tax return (with the
exception of reciprocal agreements which does not apply in this case). The nonresident state will tax any income
earned from that state.
