South Carolina's New Rate Is Real. Its Withholding Tables Are From Last November.

Act No. 110, H.4216, signed March 30, 2026, replaced South Carolina's old 6.0% top rate with two figures: 1.99% on taxable income below $30,000 and 5.21% above it, less a $966 offset so the two formulas meet exactly at $30,000. It also moved the starting point from federal taxable income to federal adjusted gross income and decoupled the state from federal deductions. Most of the internet still says 6%.

Here is what has not happened. SCDOR has issued no implementation guidance for Act 110. No information letter, no revenue ruling, no revenue procedure. The only communication on record is an April 15, 2026 web notice saying guidance will arrive later this year.

And here is the part with a cash consequence. The 2026 South Carolina withholding tables, WH1603_2026, were published November 6, 2025, roughly five months before Act 110 was signed, and have never been revised. So 2026 withholding does not reflect the 1.99% / 5.21% structure at all. Anyone who relocated to South Carolina this year is having tax withheld under the old rates, on a system the legislature already replaced.

The step-down mechanism is also widely misdescribed, including in the version of this note we drafted first. Amended section 12-6-510 does not test general fund growth. It tests whether individual income tax revenue, minus amounts credited to the Trust Fund for Tax Relief, is projected to increase by at least five percent. If it does, the reduction is the greater of $200 million or 25% of the recurring income tax surplus. The forecast in effect on February 15 is final; later revisions have no effect on that year's determination. First possible application is tax year 2027.

As for whether the test fires: the Board of Economic Advisors, on May 19, 2026, raised FY2025-26 to $15,050.8 million and FY2026-27 to $15,220.5 million while cutting projected FY27 general fund growth from 2.2% to 1.1%. That forecast explicitly excludes Act 110's rate cut. The June 25, 2026 meeting produced no revision. Next meeting is August 27, 2026.

If you would like the current-year withholding gap quantified against your own income, reply and we will run it, or start with the Tax Alpha Calculator.