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flag South Carolina shifts to a two-rate income tax system starting in 2026.

flag Gov. flag Henry McMaster signed a law shifting South Carolina to a two-rate income tax system in 2026: 1.99% on income up to $30,000 and 5.21% above that, reducing the previous top rate. flag The change is projected to save taxpayers about $325 million annually, with nearly 43% seeing lower bills. flag A new Income Adjusted Deduction will help lower-income residents. flag Future automatic rate reductions are tied to revenue growth, aiming eventually to eliminate the income tax.

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