Military Pay
Resident - If the taxpayer is a resident of South Carolina they are subject to South Carolina income tax on all income regardless of the source. This includes active duty military pay.
Members of the South Carolina National Guard or Reserves may deduct all inactive duty pay from the United States or any state for weekend drills and other inactive duty training they attended.
To subtract South Carolina National Guard or Reserves inactive pay in TaxSlayer Pro, from the South Carolina Resident Tax Return menu select:
- Subtractions from Fed Taxable Income
- National Guard/Reserve annual training & drill pay - Enter the allowable income as a positive number.
Nonresident - If the taxpayer is a nonresident of South Carolina stationed in South Carolina whose only source of income is active duty military pay, they are not required to file a South Carolina return.
One spouse is a resident of South Carolina and the other is not - For income tax purposes, a servicemember’s spouse may elect to use the same state of residence as the servicemember. If a servicemember is not a South Carolina resident but a resident of another state, his or her spouse can elect to also be a resident of that other state.
South Carolina does not permit taxpayers to choose a married filing separately filing status if they used married filing jointly on the federal return. If they filed MFJ on the federal return and one spouse is a resident and the other is not, the couple will need to file a South Carolina nonresident return.
Spouse Income - Military Spouses Residency Relief Act (MSRRA)
The MSRRA allows military spouses who reside with their service member spouse stationed in a nonresident state on military orders to keep their resident state for tax purposes. This means if the spouse has income from the nonresident state, they are not required to pay taxes to the nonresident state but report this income on their resident state return.
In order to be eligible for the income exemption under the MSRRA in South Carolina , the following conditions must be met by the military spouse/employee:
- The spouse is not a resident of the state where the service member and spouse are living.
- The spouse is in South Carolina solely to be with the service member.
- The service member is in South Carolina on military orders.
- The spouse and service member are residents of the same state.
If the military spouse meets the eligibility requirements, they can avoid South Carolina state tax being withheld from their pay by providing their employer with Form SC W-4 South Carolina Employee's Withholding Allowance Certificate.
To claim a refund of taxes withheld from South Carolina income in error in TaxSlayer Pro, from the South Carolina Nonresident Tax Return menu select:
- Modified Taxable Income
- Total Income
- Wages, salaries, tips, etc.
- Adjustments to State Wages (+/-) - Enter the allowable wages as a negative number.
Note: This is an article on reporting military pay and military spouse pay in the TaxSlayer Pro program. It is not intended as tax advice.
Additional Information:
South Carolina State Tax Information
SC DOR: Form SC-1040 Instructions
SC DOR: Schedule NR Instructions
While TaxSlayer Pro strives to make the information and links contained on this page as timely and accurate as possible, TaxSlayer Pro makes no promise or guarantee about the timeliness, accuracy or completeness of the contents of this page. The information contained on this page is for general information and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.