Accepted Answer

HI XXXXXXXXX

Thank you for using justanswer. You may deduct up to $10,000 in retirement income after age 65 (up to $3000 before age 65) on your SC individual income tax return. (SECTION 12-6-1170)

If you plan on taking a distribution larger than $10,000, and you have your old tax returns from PA showing that you already paid tax on this money to PA, then there is a credit that you may claim over your lifetime. See Below:


SECTION 12-6-3500. Retirement plan credits.

If the right to receive retirement income by a taxpayer allowed the deduction pursuant to Section 12-6-1170 was earned by the taxpayer while residing in another state which imposed state income tax on the employee's contributions, a credit is allowed against the taxpayer's South Carolina income tax liability in an amount sufficient to offset the taxes paid the other state. This credit must be claimed over the taxpayer's lifetime. The department shall prescribe the amount of the annual credit based on the taxpayer's life expectancy at the time the taxpayer first claims the retirement income deduction pursuant to Section 12-6-1170, and may require the documentation it determines necessary to verify the amount of income tax paid the other state on the contributions. Regardless of the tax rates applicable on the contributions in the other state, the total of the credit allowed may not exceed an amount determined by multiplying the contributions taxed in each year by the marginal South Carolina individual income tax rate for that year.

I have linked you to the SC tax code:

S.C. Code of Laws Title 12 Chapter 6 South Carolina Income Tax Act ...

Sometimes the links don't work, so I'm also giving you the web address that you may copy and paste into your browser:

www.scstatehouse.gov/code/t12c006.htm

Finally, you may want to look at page 23 of the SC Individual income tax instructions:

IIT Book 2006

I hope this helps

Expert:	Anne
Pos. Feedback:	100.0 %
Accepts:
Answered:	9/18/2009

Master Tax Preparer

Enrolled Agent with 20 Years Experience specializing Individual and Small Businesses