2021 – 2022 Senior Citizen State of South Carolina and Federal Tax Deductions

For senior citizens, there are a variety of tax deductions that you may be able to claim on both your South Carolina and Federal Tax Filings. For those who are filing their taxes, looking at the overall tax snapshot of your state and federal taxes is important for perspective. To ensure that you’re getting the most out of your money, begin by looking at your income taxes and state sales tax rate, then progressing to social security, retirement accounts, property, and additional exemptions, deductions, refunds, and credits that you may be eligible for to give you the biggest possible refund.

South Carolina Tax Deductions for Seniors

South Carolina Has Zero Social Security Tax

South Carolina is one of the many states that does not impose a tax on social security benefits. Taxable Social Security and Railroad Retirement on your federal tax return are exempt from South Carolina Income Tax. However, withdrawals from retirement accounts and public/private persian income are partially taxed.

Deduct Up to $15,000 from Income Taxes

A $15,000 income tax deduction is available to South Carolina residents over the age of 65. It is applicable to all forms of retirement income, including that from 401(k) plans, IRAs and pension plans. This tax deduction is a great way for Greenville residents to save money during retirement.

South Carolina Property Tax Benefits, Deductions, and Exemptions for Seniors 65 and Older

Low Property Taxes

South Carolina has one of the lowest effective property tax rates in the country, at just 0.57%. In addition to paying this low rate, South Carolina seniors who’ve lived in the state over a year can benefit from a “homestead exemption,” which exempts them from property taxes on the first $50,000 of their home’s value.

Zero Property Tax in Active Adult Community Living and Senior Retirement Communities

For those 55+ years of age and above, living in an active adult community and senior retirement community is an excellent option. Depending on the home agreement or contract, residents may be able to pay zero property tax on that residence. In addition to zero property tax, some seniors will find that it is cheaper to live in a retirement community after comparing monthly expenditures (home payment, home maintenance and repairs, lawn maintenance, dining/groceries, electricity, water, transportation, internet, etc.) 

Top-Rated Senior Living in South Carolina

One of the top-rated communities in the state is Wildewood Downs, a Continuing Care Retirement Community (CCRC) located in Northeast Columbia off of Polo Rd. As a CCRC, Wildewood Downs proudly offers a full continuum of care including 55+ active adult living, independent living, assisted living, memory care, skilled nursing, and senior rehabilitation. The benefit of living in a community like Wildewood Downs is that should your needs change, there is no need to relocate as you’ll be at home in a community of friends and have easy access to the care you require in your own home. To learn more about Wildewood Downs, click here

South Carolina State Income Tax Rate 2022

The State of South Carolina has a simplified income tax structure which follows the federal income tax laws. South Carolina accepts the adjustments, exemptions and deductions allowed on your federal tax return with few modifications. Your federal taxable income is the starting point in determining your state income tax liability. Individual income tax rates range from 0% to a top rate of 7% on taxable income.

Source: South Carolina Department of Revenue – Individual Income Tax 

South Carolina State and Local Sales Tax Rate

South Carolina has a state sales tax of 6% and allows local governments to collect local sales tax. Depending on local municipalities, the total combined tax rate can be as high as 9% and as low as 6%. As of December 2021, the average state and local sales tax in South Carolina is 7.5%. (Combined State and Average Local Sales Tax Rates as of July 2021 – High: Louisiana – 9.55%, Low: Alaska – 1.76% and Hawaii – 4.44%).

Source: South Carolina: Sales Tax Handbook and Tax Foundation – State and Local Sales Tax Rates, Midyear 2021

State of North Carolina and Federal Tax Resources:

State of South Carolina Official Website
South Carolina Department of Revenue
State of South Carolina – Department of Motor Vehicles (DMV)
United States Internal Revenue Service (IRS)
United States Department of the Treasury

Federal Tax Deductions for Seniors

For those who are 65 and older, in addition to state and local tax deductions there are federal tax deductions and exclusions that may apply to your yearly tax filing. Some of the top deductions are listed below:

What is the Standard Federal Tax Deduction for Seniors Over 65?

The standard tax deduction is a set dollar amount that reduces your overall taxable income. This can vary based on your filing status, age, whether you are blind, or if another taxpayer can claim you as a dependent. In 2021 and 2022, the IRS increased the standard deduction for seniors who are 65 and over. The information for both years can be found below:

2021 Senior Citizen Standard Income Tax Deduction

In the 2021 tax year (filed in 2022), the standard deduction is $12,550 for Single filers and Married Filing Separately, $25,100 for Married Filing Jointly and Surviving Spouses, and $18,800 for the Head of Household. 

For those 65 years of age or legally blind, the standard deduction was increased in 2021 to $1,700 for Single filers or Head of Household, and $1,350 (per person) for married filing jointly, married filing separately, and Surviving Spouses.

2021 Standard Tax Deduction for Seniors Over 65 Years of Age with the Standard Deduction Increase*:

Filing Status 2021 Standard Deduction Under 65 Years of Age 2021 Additional Standard Deduction Over 65 Years of Age 2021 Total Standard Deduction Over 65 Years of Age*
Single (Unmarried and not a Surviving Spouse) $12,550 $1,700  = $14,250
Married Filing Separately $12,550 $1,350  = $13,900
Married Filing Jointly $25,100 $1,350 + $1,350 (One deduction for each spouse) = $27,800
Surviving Spouses $25,100 $2,700 = $27,800
Head of Household $18,800 $1,700 = $20,500

* If you are legally blind, there are additional deductions that apply. Check IRS Form 1040 or 1040A and speak with your licensed tax professional to learn more. 

To check your 2021 Standard Deduction, visit the Interactive Tax Assistant (ITA) at IRS.gov

2022 Senior Citizen Standard Income Tax Deduction

In the 2022 tax year (filed in 2023), the standard deduction is $12,950 for Single Filers and Married Filing Separately, $25,900 for Married Filing Jointly and Surviving Spouses, and $19,400 for the Head of Household. 

For those 65 years of age or legally blind, the standard deduction was increased in 2022 to $1,750 for Single filers or Head of Household, and $1,400 for Married Filing Jointly, Married Filing Separately, and Surviving Spouses.

2022 Standard Tax Deduction for Seniors Over 65 Years of Age with the Standard Deduction Increase*:

Filing Status 2022 Standard Deduction Under 65 Years of Age 2022 Additional Standard Deduction Over 65 Years of Age 2022 Total Standard Deduction Over 65 Years of Age*
Single (Unmarried and not a Surviving Spouse) $12,950 $1,750  = $14,700
Married Filing Separately $12,950 $1,400  = $14,350
Married Filing Jointly $25,900 $1,400 + $1,400 (One deduction for each spouse) = $28,700
Surviving Spouses $25,900 $2,800 = $28,700
Head of Household $19,400 $1,750 = $21,150

* If you are legally blind, there are additional deductions that apply. Check IRS Form 1040 or 1040A and speak with your licensed tax professional to learn more. 

Each situation is different, but if the standard deduction is less than your itemized deductions, it’s better to itemize and save money. If your standard deduction is more than your itemized deductions, it’s better to opt for the standard deduction. Speak with your licensed tax professional to determine which deduction is correct for you.

Medical and Dental Federal Tax Deductions

For retirees, medical, healthcare, and dental expenses are often one of the largest expenses. According to IRS.gov, if you itemize your deductions for a taxable year on Schedule A (Form 1040 – Itemized Deductions), you may be able to deduct expenses you paid that year for medical and dental care for yourself, your spouse, and your dependents. You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you’re allowed to deduct on Schedule A (Form 1040). Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.These deductions include prescription drugs, nursing home care, long-term care insurance premiums, insurance premiums (including Medicare), and additional out-of-pocket healthcare expenses. For a full list of acceptable tax deductions, visit IRS.gov’s Medical and Dental Expenses here

Is Assisted Living Tax Deductible?

For those who are in an assisted living retirement community, there may be medical tax deductions that are associated with the care that is received during that tax year.

Residents of assisted living may be entitled to deduct as a medical expense a portion of the monthly service fees and entrance fees which represent medical care in the year paid. The Internal Revenue Code (IRS) does not contain detailed guidance on how to compute this, therefore each resident should consult their licensed tax professional as to the ultimate deduction and disclosure decisions based on their individual situation.

Monthly service fees paid for assisted living and skilled nursing care may be deducted as medical expenses except those charges for non-medical items such as beauty shop charges or guest meals. This treatment is allowable provided that residents require the services, are chronically ill and the services are provided under a plan of care prescribed by a licensed health care practitioner (IRC Section 7702B(c)).

A resident must meet certain criteria to be eligible for a 100% medical deduction for monthly services fees paid. The resident must be unable to perform, without substantial assistance from another individual, at least two activities of daily living for a period of at least 90 days, or the resident requires substantial supervision to protect their health and safety due to severe cognitive impairment. Activities of daily living include eating, toileting, transferring, bathing, dressing, and continence. The services must also be provided pursuant to a plan of care prescribed by a licensed health care practitioner.

For a full list of acceptable tax deductions, visit IRS.gov’s Medical and Dental Expenses here

Federal Tax Resources:

United States Internal Revenue Service (IRS)
United States Department of the Treasury
IRS Standard Deduction Calculator 
IRS Medical and Dental Expenses

Disclaimer: The information above should function as a starting point for your tax research but should not be substituted for direct advice from a licensed tax professional. State and Federal taxes are ever-changing and this list may not be current or up to date with the current tax laws, deductions, relief programs, rebates, requirements, etc. Additional tax deductions, credits, and relief programs may be available depending on your town and county of residence within the State of South Carolina. Check with your local municipality’s tax department, the South Carolina Department of Revenue, the U.S. Internal Revenue Service (IRS) and your licensed tax professional to learn more about programs that are available for the current tax year.