What the rule says
South Carolina has neither a state estate tax nor a state inheritance tax. South Carolina has not imposed an estate tax since the federal pickup tax was eliminated in 2005, and South Carolina has never had a state inheritance tax in the modern era.
For South Carolina decedents:
- No South Carolina estate tax applies - No South Carolina inheritance tax applies - Only federal estate tax under Internal Revenue Code § 2001 applies, with the federal exclusion (~$13.99 million per individual in 2026, indexed for inflation)
How South Carolina compares to other Southeastern states
South Carolina's tax framework is among the more favorable in the Southeast:
- South Carolina: No estate tax, no inheritance tax - Tennessee: No estate tax, no inheritance tax (since 2016) - Georgia: No estate tax, no inheritance tax - Alabama: No estate tax, no inheritance tax - North Carolina: No estate tax, no inheritance tax - Florida: No estate tax, no inheritance tax - Mississippi: No estate tax, no inheritance tax - Kentucky: No estate tax; inheritance tax with class-based rates (0%/4-16%/6-16%) - Virginia: No estate tax, no inheritance tax
South Carolina is part of the broad Southeastern grouping of states without state-level death taxes. Within the Southeast, only Kentucky imposes any state-level death tax (inheritance tax with class-based exemptions for spouse, lineal descendants, and lineal ascendants).
What this means in practice
For South Carolina residents:
- Most estates face no estate tax of any kind. With the federal exclusion at $13.99M per individual, most South Carolina residents pass wealth to heirs free of estate tax. - High-net-worth South Carolina residents focus exclusively on federal planning. Without state-level overlay, planning addresses only the federal estate tax framework. - South Carolina is attractive for retiree relocation. Combined with relatively favorable income tax treatment of retirement income, South Carolina is a popular destination for retirees seeking tax efficiency.
Federal estate tax planning for South Carolina residents
For high-net-worth South Carolina residents:
- Calculate federal exposure. Estates approaching $13.99M (2026) need federal planning. - Use marital deduction strategically. Unlimited marital deduction for transfers to U.S. citizen spouses. - Use federal portability. Surviving spouse can use the deceased spouse's unused federal exclusion. - Lifetime gifting. South Carolina has no state-level gift tax; federal gift tax exemption ($13.99M lifetime) coordinates with estate tax exemption. - Charitable bequests. Reduce taxable estate. - Bypass trust planning. Less critical without state estate tax (different from Massachusetts, Illinois, Minnesota), but useful for federal exclusion preservation.
What you can do about it
For South Carolina residents:
- Most South Carolinians need no special estate tax planning for state-level taxes. - High-net-worth South Carolinians focus on federal planning. - File Form 706 for federal portability when applicable, even when no federal estate tax is owed. - Coordinate with overall planning. South Carolina residents can focus on probate avoidance, family protection, and federal planning rather than state estate tax planning.
For non-South Carolina residents considering relocation:
- South Carolina residency for tax efficiency. Combined with no state estate tax and favorable retirement income treatment, South Carolina is among the more tax-favorable states. - Domicile establishment. Becoming a South Carolina resident requires more than physical presence — intent, severance of ties with prior state, and other factors apply.
Who this affects most
South Carolina's tax framework is most relevant for:
- High-net-worth South Carolina residents whose estates approach the federal exclusion - Retirees considering South Carolina residency for tax efficiency - Estate planners coordinating planning without state-level death tax considerations - Out-of-state advisors whose clients have moved to South Carolina from higher-tax states
The absence of state estate and inheritance taxes simplifies South Carolina estate planning relative to neighboring states like Kentucky (inheritance tax) or more distant states like Maryland (both estate and inheritance tax) or Massachusetts (low-threshold estate tax).