Income tax for individuals
South Carolina Estimated Tax Payments in the First H.4216 Year
South Carolina expects estimated payments from anyone who will owe $100 or more after withholding, but the 2026 SC1040ES worksheet was printed before H.4216 and still uses the old rates and starting point. For 2026, estimate from federal AGI using the new SCIAD and the 1.99% and 5.21% rates. You avoid an underpayment penalty if your withholding and timely estimates cover at least 90% of your 2026 tax or 100% of your 2025 tax, rising to 110% if your 2025 AGI was over $150,000.
- The 2026 SC1040ES, revised October 2025, predates H.4216; its tax schedule is out of date.
- SCDOR's September 2026 notice told taxpayers to adjust estimates and count earlier payments.
- Prior-year safe harbor: 100% of 2025 tax, or 110% if 2025 AGI exceeded $150,000 ($75,000 married filing separately).
- Uneven income can be handled with the annualized method on the SC2210.
- Farmers, fishermen and certain others have their own rules.
- Payments of $15,000 or more must be made electronically.
Who this applies to
- Self-employed people, landlords and investors without enough withholding
- Retirees drawing pensions or IRA distributions without South Carolina withholding
- High earners who lose the SCIAD entirely and may owe more in 2026 than in 2025
Who this may not apply to
- People whose withholding covers their tax and who will owe less than $100
- Taxpayers who had no South Carolina liability for a full 12-month 2025 tax year
The 2026 form was printed before the law changed
SCDOR released the 2026 SC1040ES in October 2025. Its worksheet starts from federal taxable income and applies a three-bracket schedule topping out at 6%. H.4216 was signed on March 30, 2026 and applies to tax years beginning after 2025. It moved the starting point to federal adjusted gross income, replaced federal deductions with the South Carolina Income Adjusted Deduction, and set two rates: 1.99% on income under $30,000 and, at $30,000 and above, 5.21% of taxable income minus $966. As of this writing SCDOR had not posted a revised 2026 SC1040ES, so the form's worksheet should not be relied on for the tax calculation itself.
SCDOR addressed this directly in a September 1, 2026 news release ahead of the September 15 payment, saying taxpayers may need to make adjustments and should take their April 15 and June 15 payments into account. It also said a SCIAD calculator will launch on MyDORWAY later this year.
Re-estimating 2026 tax under the new law
- Start with expected 2026 federal adjusted gross income.
- Apply South Carolina additions and subtractions, such as the retirement deduction, the 44% capital gain deduction and the Social Security subtraction.
- Subtract the SCIAD for your filing status, reduced by the phase-out if federal AGI exceeds $40,000 single, $60,000 head of household or $80,000 joint.
- Apply 1.99% if taxable income is under $30,000, otherwise 5.21% times taxable income minus $966.
- Subtract expected credits and South Carolina withholding, then subtract estimates already paid in April and June.
The direction of the change depends on the household. Lower rates help most filers. But because the SCIAD disappears at federal AGI of $95,000 single and $190,000 joint, and itemized deductions no longer count, some higher-income and itemizing households will see a larger South Carolina liability than the old worksheet suggests. Those are the people most at risk of an underpayment penalty in 2026.
Safe harbors that prevent a penalty
| Test | What it requires | Notes |
|---|---|---|
| Current-year test | Withholding plus timely estimates of at least 90% of 2026 tax | Each installment is measured separately |
| Prior-year test | 100% of 2025 South Carolina tax | Requires a 2025 return covering a full 12 months |
| Prior-year test, higher income | 110% of 2025 tax if 2025 AGI exceeded $150,000, or $75,000 married filing separately | Same 12-month requirement |
| Small balance | Tax after withholding under $100 | No penalty |
| No prior liability | No South Carolina tax liability for a full 12-month 2025 tax year | No penalty |
The prior-year test can be the simplest choice this year. Your 2025 tax is already known, and paying 100% or 110% of it in four timely installments protects you even if the new law raises your 2026 tax. If your 2026 tax will be noticeably lower than 2025, the 90% current-year test may let you pay less, but it requires a reliable estimate.
Uneven income and the SC2210
South Carolina measures each installment period, so a large payment in January does not cure a short payment in June. Withholding is treated as paid evenly through the year unless you show the actual dates, which can help someone who boosts withholding late in the year. If income arrives unevenly, the SC2210 lets you use the annualized income method, computed on federal Schedule AI for South Carolina purposes, so earlier installments are based on the income you actually had by then. Paying a missed installment later stops further penalty on it but does not erase the penalty already accrued for the earlier period.
Waivers and special groups
- Waiver for a casualty, disaster or other unusual circumstance where a penalty would be inequitable.
- Waiver if you retired after age 62, or became disabled, in the current or prior year and the underpayment had reasonable cause (the 2025 form says 2024 or 2025).
- No penalty on underpayment caused by personal service income earned in another state that withheld its own tax.
- Farmers and fishermen with at least two-thirds of gross income from farming or fishing can pay once by January 15, 2027, or file and pay in full by March 1, 2027.
- Nonresident contractors on South Carolina contracts over $10,000 who are subject to 2% contract withholding are excepted from estimates.
Making the payment
SCDOR accepts estimated payments online through MyDORWAY at dor.sc.gov/pay, and no MyDORWAY account is needed. If you pay online, do not also mail a voucher. Section 12-54-250 requires any payment of $15,000 or more to be made electronically. Mailed vouchers go to SCDOR, IIT Voucher, PO Box 100123, Columbia SC 29202. If you file your 2026 return and pay the balance in full by February 1, 2027, you can skip the January installment. The full calendar of 2026 due dates is on our deadlines page.
Haigler CPA Group can re-run your 2026 South Carolina estimate under the new law before the January installment. Call (843) 214-0631 for a free consultation.
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Sources
- SCDOR — 2026 SC1040ES Individual Declaration of Estimated Tax
- SCDOR — 2025 SC2210, Underpayment of Estimated Tax by Individuals
- SCDOR — News release: estimated payments due September 15, read Information Letter #26-20 first
- SCDOR — Information Letter #26-20, Individual Income Tax Reform
- SC General Assembly — H.4216 (Act No. 110 of 2026), ratified text
- IRS — Topic 306, Penalty for underpayment of estimated tax
South Carolina publishes new guidance and local governments change their rates, so check the source pages for anything that has moved since the date above. The information on this site is general in nature and is not tax, legal, or accounting advice for your situation. Tax law changes and the right answer depends on facts we would need to review with you. Please speak with a qualified professional before acting on anything you read here.
Questions people ask about this
Can I use the worksheet in the 2026 SC1040ES booklet?
Use it for the payment vouchers and instructions, not the tax math. Its worksheet starts from federal taxable income and uses the pre-H.4216 tax schedule. Compute 2026 tax from federal AGI using the SCIAD and the new rates instead.
My April and June estimates were based on the old rates. Do I need to fix them?
SCDOR has said to account for the April and June payments when making later ones. Recompute your 2026 tax, subtract what you have paid, and spread the shortfall or reduce the remaining payments. If you were following the prior-year safe harbor, you may not need to change anything.
I retired in 2026 and my withholding stopped. Will I owe a penalty?
Possibly, if your payments fall short of the safe harbors. The SC2210 includes a waiver for taxpayers who retired after age 62, or became disabled, in the current or prior year when the underpayment had reasonable cause, and you can ask for it on the form.
Does South Carolina charge interest as well as the underpayment penalty?
The SC2210 penalty is calculated like interest on each late or short installment, at a rate SCDOR sets. If you do not compute it, SCDOR will compute it and send a bill.
Keep reading
- SC income tax in 2026For tax year 2026, South Carolina taxes income under $30,000 at 1.99% and income of $30,000 or more at 5.21% minus $966. The state return now starts from federal adjusted gross income, ignores the federal standard and itemized deductions, and gives its own South Carolina Income Adjusted Deduction (SCIAD) instead. The state's own subtractions, such as the retirement, age 65, military retirement and 44% capital gains deductions, were not amended by the act.
- The SC Income Adjusted DeductionThe South Carolina Income Adjusted Deduction (SCIAD) replaces the federal standard and itemized deductions on South Carolina returns from tax year 2026. It is $15,000 for single or married filing separately, $22,500 for head of household and $30,000 for married filing jointly or surviving spouse, and it phases out as federal AGI rises, disappearing at $95,000, $142,500 and $190,000 respectively.
- SC retirement and age 65 deductionsSouth Carolina lets the original owner of a qualified retirement plan deduct up to $3,000 of taxable retirement income a year, rising to $10,000 from the year they turn 65. Separately, residents 65 and older get a deduction of up to $15,000 each against any kind of income, reduced by the retirement deduction they claim. H.4216 did not amend Section 12-6-1170, which holds both deductions.
- The SC 529 plan deductionSouth Carolina lets you deduct contributions to its own Section 529 college savings plan, Future Scholar, up to the plan's maximum account limits, with no separate state dollar cap. Contributions made during 2026 or by April 15, 2027 can be deducted on the 2026 return. H.4216 did not change this deduction, so it still sits on top of the new SC Income Adjusted Deduction.
- SC 44% capital gains deductionSouth Carolina lets individuals, estates and trusts deduct 44% of their net capital gain, which is net long-term gain (assets held more than one year) minus net short-term loss. At the 2026 top rate of 5.21%, that taxes the remaining 56% of a long-term gain at an effective rate of about 2.9%. H.4216 did not amend Section 12-6-1150, but the full gain still counts in federal AGI for the new SCIAD phase-out.
- South Carolina tax guideHow South Carolina taxes income, businesses and property, and what the Charleston area adds on top, with the state or local source beside every rule.
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