If I live in North Carolina and work in South Carolina, can I go exempt on my pay checks?

[NCperson]

no - that is not correct. 

you must have SC taxes withheld on your paycheck. 

You will prepare a SC non-resident tax return first and THEN prepare a NC resident tax return second.  it is important to complete in that order. 

Since you work in SC you will owe tax in that state.

Since you live in NC, you will owe tax in that state; however, you will get a credit for what you paid to SC so that you are not taxed twice on the same dollar of income. 

you may owe a few dollars to NC, but it could turn out you owe nothing.  

[xmasbaby0]

Living in one state and working in another state does not make you exempt from paying tax.  First of all, you are still always going to be subject to federal tax, so you cannot say on a W-4 that you are exempt.  And...as already explained above, you pay tax to the state you live in.   You will FIRST prepare a NON-resident state for the state you work in, and then prepare a return for the state you live in.

https://ttlc.intuit.com/questions/2895920-why-would-i-have-to-file-a-nonresident-state-return

[NCperson]

oh and p.s. on the federal W-4, you can no longer check an 'exempt' box in any event!  the payroll software will determine whether your income is low enough that it does not warrant any tax being withheld.  

you can cheat the system to force no withholdings by erroneously completing step 5b, but there is not a simple check box to indicate you are exempt from withholdings, like there was years ago. 

[Opus 17]

No.

Both those states have a state income tax.

You always owe income tax to your home state (the state where your permanent residence is located) on all your worldwide income.  Then, you also owe income tax to a state where you live or work while earning the income.  In this case, you will file a NC resident tax return to report all your world-wide income, and you will file a SC non-resident tax return to report only income earned while living or working in SC.  Prepare the SC return first.  Then on your NC return, you will get a credit for taxes you pay to SC, so you aren't double-taxed on the same money.

Because SC income tax rates are higher than NC income tax rates, you should have SC tax withheld from your job.

[NCperson]

Depending on your income, SC tax may be higher or lower than NC

NC is a flat 4.75% in 2023 (4.5% in 2024) on your taxable income (very close to but not the same as Federal Form 1040 Line 15)

SC tax is graduated from 0% to 6.3% of your taxable income (and is based on Federal Form 1040 Line 15)

at the lower income levels, there could be some due to NC; at the higher income levels it should all be due to SC.