According to the South Carolina Department of Revenue, "your spouse may be exempt from South Carolina income tax on income from services performed in South Carolina under the Federal Military Spouses Residency Relief Act. The provisions include:
- The state where the service member and spouse are living is not the domicile of the spouse or the servicemember
- The spouse is in South Carolina solely to be with the servicemember
- The servicemember is in South Carolina as a result of military orders; and
- The spouse and servicemember both have the same domicile."
To claim tax-exempt from South Carolina withholding:
To claim the exemption, the employee (spouse) must provide the following information to the employer:
- A completed Form SC W-4, Annual Withholding Tax Exemption Certification for Service member’s Nonresident Spouse.
- An original of the servicemember’s latest Leave and Earning Statement (LES). The LES assignment location must match the information provided on SC W-4.
- A current military identification card identifying the employee as a military spouse.
The SC W-4 is an annual form. It must be completed before January 1 of each calendar year during which the employee’s income remains exempt. The exemption expires on December 31 unless a new SC W-4 is completed.
To claim a refund of taxes withheld from your South Carolina income, follow these steps in the program:
- Federal Section
- Wages and Salaries
- Edit W-2 - Remove the amount listed in Box 16 of the W-2-Box 17 information remains
Military Spouse income may be taxable on your state return where you file as a resident.