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Economy Environment South Carolina

Your SC Tax Refund May Be Smaller Next Year. Here’s why

If you get a tax refund from South Carolina next year, it may be lower than what you’d typically receive because of withholding adjustments. According to the South Carolina Department of Revenue, taxpayers may see reduced refunds because the state is withholding less taxes this year. The South Carolina General Assembly voted in 2022 to reduce the top income tax rate if certain General Fund growth tests were met. Following the tax rate cut, the SCDOR updated the state withholding tables, which employers use to determine how much South Carolina income tax is pulled from workers’ paychecks. The updated tables mean less taxes are being withheld from paychecks, which may reduce your refund next year, SCDOR states.

WHAT ELSE TO KNOW ABOUT SC REFUNDS The amount of the withholding change in taxpayers’ paychecks depends on several factors, including how much money a taxpayer makes and how often they are paid. The withholding changes only impacts the South Carolina individual income tax. Any taxpayers who have experienced significant life changes should check their withholding early. Such life changes include: Marriage Divorce Birth of a child New job or raise New taxable income not subject to withholding Changes in itemized deductions or tax credits

Source: The State