South Carolina tips tax calculator: add it back

South Carolina is the state that actively takes the deduction away: it starts from federal taxable income but still follows the Internal Revenue Code as of December 31, 2024, so filers must add the federal tips deduction back.

Your South Carolina tips

State where you work Qualified tips this year

Voluntary cash and card tips on your W-2, 1099 or Form 4137 — not service charges.

Tax year

2025202620272028

Filing status Other income in your AGI

Wages without the tips, plus any other income (both spouses if filing jointly).

Your occupation The 71 Treasury Tipped Occupation Codes in the final rule (TD 10044).

How you are paid

Employee (W-2) Self-employed (1099)

More options

Itemized deductions (if larger than the standard deduction)

State marginal rate override (%) Leave blank to use the state’s published rate for your bracket.

Federal income tax saved in 2026Deduction $18,000 at 12% $2,160

$18,000 of the $25,000 cap used (72%)

Qualified tips	$18,000
After the $25,000 cap	$18,000
Income phase-out (MAGI $48,000)	$0
Tips deduction	$18,000
Federal tax before → after	$3,580 → $1,420
Social Security & Medicare still due on tips	$1,377
South Carolina 2026: Tips stay taxable in this state	$0
Total income tax saved	$2,160

What the estimate leaves out

Information Letter #26-4 and a failed vote

The Department of Revenue’s January 30, 2026 letter lists the 2025 federal provisions South Carolina filers must adjust for — the larger standard deduction, the senior deduction, tips, overtime, car-loan interest and others — “until the South Carolina Legislature addresses conformity.” The conformity bill, H. 3368, passed the House 121–0 but failed second reading in the Senate 16–27 on March 31, 2026.

South Carolina figures

Cash wage / minimum	$2.13 / $7.25
In force	July 1, 2026
Next change	none scheduled
Tipped threshold	More than $30 a month in tips
Tips on the 2025 return	tips stay taxable in this state. Information Letter #26-4: until the Legislature updates conformity, taxpayers “will need to adjust their return” for the federal tips deduction. Source: South Carolina Department of Revenue
Tips on the 2026 return	tips stay taxable in this state. The conformity bill H. 3368 failed second reading in the Senate on March 31, 2026, so the add-back remains. Source: South Carolina General Assembly

A new rate structure, but no tips break

Act 110 of 2026 (H. 4216) rebuilt South Carolina’s individual tax from 2026: 1.99% on the first $30,000 of taxable income and 5.21% above, a new South Carolina Income Adjusted Deduction that phases out with income, and no adoption of the federal standard deduction. It did not adopt section 224. South Carolina also has no state minimum wage law, so the FLSA’s $2.13 cash wage applies.

A Charleston server

The federal deduction of $22,000 saves $2,550; on the South Carolina return the same amount is added back. Thirty hours at $2.13 plus $130 of tips leaves $24 of make-up owed.

Check a South Carolina workweek

Employer make-up owed$2.13 cash wage + tips must reach $7.25 an hour. $14

Minimum for the hours	$232
Cash wage paid	$68
Tips counted toward the minimum	$150
Your effective hourly pay	$7.25

How the make-up rule works

Where these figures come from

Federal rules: how the deduction works. Nearby: North Carolina, Georgia.

Figures verified against primary sources on October 5, 2026