South Carolina LLC Taxes Explained: New 2026 Rates
South Carolina just changed how it taxes personal income, starting with the 2026 tax year — a simpler, lower two-rate system replacing the old graduated brackets. Here's every layer your LLC touches, with an estimator built around the new structure.
For 2026, South Carolina individual tax is 1.99% of taxable income below $30,000; at $30,000 or more, it is 5.21% of taxable income minus $966. A separate annual 3% active-trade-or-business election has qualified-income rules. Individual owners review I-335; qualifying partnerships/S corporations review the distinct entity election, I-435 and SC1065/SC1120S. Passive income, capital gains and personal-service amounts can be excluded from the qualified base. A federal S election does not itself make either state election.
- State income tax (2026+)
- 1.99% / 5.21% two-rate
- First-bracket threshold
- $30,000 taxable income
- Prior top rate (2025)
- 6.0%
- Entity-level tax (default)
- None
- Sales tax
- 6% + local up to 3%
- S-corp filing trigger
- Form CL-1, $25
The Tax Layers in South Carolina
Federal: income + self-employment tax
Pass-through profits hit your 1040 at your federal bracket, plus 15.3% SE tax on 92.35% of net profit — usually the largest line for most LLC owners.
South Carolina state income tax: new two-rate system for 2026
2026 individual formula: below $30,000, taxable income ×1.99%; $30,000 or more, taxable income ×5.21% minus $966. These are alternative formulas for the entire taxable amount, not stacked marginal brackets.
Entity level: nothing
No franchise tax on a standard pass-through LLC. Form CL-1 ($25) only applies if you elect S-corp taxation.
Sales tax: 6% + local (if applicable)
State rate plus local option taxes up to 3%. See Step 7.
Estimate Your Combined Bill
South Carolina LLC Tax Estimator
Default single-member illustration; excludes the 3% active-business and entity PTE elections, credits, local taxes and complete return adjustments. Total shows selected taxes only.
The New 2026 Two-Rate System
2026 individual formula: below $30,000, taxable income ×1.99%; $30,000 or more, taxable income ×5.21% minus $966. These are alternative formulas for the entire taxable amount, not stacked marginal brackets.
The S-Corp Question (~$60–80K Profit)
For 2026, South Carolina individual tax is 1.99% of taxable income below $30,000; at $30,000 or more, it is 5.21% of taxable income minus $966. A separate annual 3% active-trade-or-business election has qualified-income rules. Individual owners review I-335; qualifying partnerships/S corporations review the distinct entity election, I-435 and SC1065/SC1120S. Passive income, capital gains and personal-service amounts can be excluded from the qualified base. A federal S election does not itself make either state election.
Your South Carolina Tax Calendar
| Date | What's Due |
|---|---|
| Apr 15 / Jun 15 / Sep 15 / Jan 15 | Quarterly estimated taxes — federal and South Carolina, on pass-through profit |
| Mar 15 | Form 1065 (multi-member LLCs) + K-1s |
| Apr 15 | Form 1040 + South Carolina SC1040 |
| If S-corp elected | Form CL-1 Initial Annual Report ($25) to the Department of Revenue |
| Monthly/Quarterly | Sales tax returns via MyDORWAY, if applicable |
Use the appropriate 2026 individual formula and review the separate qualified active-business elections before choosing a tax treatment. The estimator illustrates selected default taxes; it does not decide election eligibility or calculate a complete return. Check local business licensing separately.
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2026 formula and separate 3% elections
For 2026, South Carolina individual tax is 1.99% of taxable income below $30,000; at $30,000 or more, it is 5.21% of taxable income minus $966. A separate annual 3% active-trade-or-business election has qualified-income rules. Individual owners review I-335; qualifying partnerships/S corporations review the distinct entity election, I-435 and SC1065/SC1120S. Passive income, capital gains and personal-service amounts can be excluded from the qualified base. A federal S election does not itself make either state election.
South Carolina LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. For filing and ongoing compliance, confirm the requirements with the responsible state agency. This is educational information, not legal or tax advice.
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