COLUMBIA, S.C. — The South Carolina Department of Revenue wants workers in the state to know they might be seeing a little bit more money in their paychecks beginning in 2023.
That's because SCDOR has adjusted the state withholding tax tables as a result of the Comprehensive Tax Cut of 2022 passed by state lawmakers this summer.
The top income tax rate has been reduced from 7% to 6.5% -- and could be reduced again in the future if certain general fund growth tests are met.
Most South Carolina workers should notice a difference in their 2023 paychecks as fewer taxes will be withheld. The amount of the change will depend on a variety of factors including how much each worker makes and how often they are paid.
Withholding adjustments only affect state income taxes, not federal, local, or other state taxes, and workers may choose to have more taxes taken out of their checks.
SCDOR uses this example as to how the adjustments might affect your paycheck:
- A taxpayer who makes an annual salary of $39,000 and takes three allowances.
- Using 2022 tax rates and withholding tables, this taxpayer would have $1,378.86 in Withholding.
- Using 2023 tax rates and withholding tables, the withholding would be $757.35, which equates to an additional $621.51 total in their paychecks throughout the year.
For those who owed money on their returns in 2022, changing withholding can head off a tax bill in 2023.
The newly adjusted withholding tax tables take effect on Jan. 1, 2023, so they won't have an effect on the coming tax season when taxpayers will file their 2022 individual income tax returns. Taxpayers should see the impact of the new withholding tax tables when they receive their paychecks starting Jan. 1, and when they file their 2023 individual income tax returns in 2024.