Governor McMaster signs bill eliminating tax on veterans

SPARTANBURG, S.C. (WSPA) — Under a new law, veterans in South Carolina can deduct all military retirement payments from taxable income.

The “Workforce Enhancement and Military Recognition Act,” signed by S.C. Gov. Henry McMaster last week, takes effect this year, providing a significant tax cut for many veterans in the state.

Under the previous law, veterans could deduct up to $17,500 of military pension payments until age 65, when they could deduct $30,000.

Previous Veteran Exemptions

Additionally, veterans in South Carolina may be eligible for the following income tax exemptions in South Carolina that were already in effect, according to the South Carolina Department of Revenue.

• Any federal tax-exempt pension or compensation provided by the U.S. Department of Veterans Affairs

• Combat pay and certain benefits not included in federal taxable income

• Retirement income paid by the U.S. government for service in the Reserves or National Guard 

• Income received for service in the National Guard or the Reserves for customary annual training, weekend drills, and other inactive duty training is generally exempt

• Service pay for non-resident military personnel on active duty in South Carolina who are legal residents of other states

Previous Property Tax Exemptions

• Veterans deemed totally and permanently service-connected disabled qualify for a tax exemption on a home and land on the same parcel, up to five acres, that is classified as owner-occupied and either titled solely to the veteran or jointly with a spouse, and a tax exemption on up to two private passenger vehicles owned or leased by a veteran or jointly with a spouse

• Medal of Honor recipients qualify for a tax exemption on a home and land up to one acre that is either titled solely to the recipient or jointly with a spouse, and a tax exemption on up to two vehicles owned or leased by the recipient

• Former prisoners of war (POW) from WWI, WWII, the Korean War or the Vietnam War qualify for: The same tax exemptions granted to Medal of Honor recipients for homes and land up to one acre that is classified as owner-occupied and either titled solely to the former POW or jointly with a spouse; and a tax exemption on up to two private passenger vehicles owned or leased by the former POW or jointly with a spouse.

• Surviving spouses for all three types of veterans listed above qualify for tax exemptions on the home if they inherit sole ownership from the deceased spouse. The surviving spouses of POWs and disabled veterans can qualify for exemptions on up to one vehicle solely owned by them.