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No Tax on Overtime in South Carolina

1.99%–5.21%

The deduction is federal. South Carolina still charges its own tax on those same hours.

On $5,885 of overtime premium

You save $1,020, but South Carolina takes back $390

Worked on South Carolina's own average wage ($63,750, about $31/hour per BLS) with 8 overtime hours a week for 48 weeks. The OBBBA deduction cuts your federal tax, but not your state base, so South Carolina charges anyway. FICA is never touched: $450 of Social Security and Medicare on those hours.

South Carolina keeps 38.0% of what the federal deduction gives back.

What the new federal overtime deduction actually saves you — and what it does not.

2025–2028

Federal tax saved: $1,183. FICA still owed on that overtime: $1,234.

Federal tax saved
per year, at filing
$1,234FICA still owed on it
7.65% of your overtime — the deduction does not touch it

Of your $16,128 overtime pay a year

  • $12,285You keep76.2%
  • $1,539Federal9.5%
  • $1,234FICA7.7%
  • $1,069State6.6%
Enter your overtime
Filing status
Overtime pay for the year (gross)
$16,128
Qualifying premium (the half of time-and-a-half)
$5,376
Deduction applied (Schedule 1-A)
$5,376
Federal tax without the deduction
$7,531
Federal tax with the deduction
$6,348
Take-home for the year
$59,715

Estimates only. Not tax or legal advice. Consult a professional. Models FLSA time-and-a-half: the deductible premium is half your regular rate per overtime hour, capped and phased out per Schedule 1-A.

How the split moves with your overtime

Single filer on $63,750 of straight-time pay in South Carolina, tax year 2026. The last row is the deduction cap.

Overtime premiumFederal savingSouth Carolina taxFICANet benefit
$2,000$240−$133−$153$107
$4,000$605−$265−$306$340
$6,000$1,045−$398−$459$647
$8,000$1,485−$530−$612$955
$12,500$2,475−$829−$956$1,646

Applies South Carolina's income tax, which for 2026 is not reduced by the deduction. Informational estimate, not tax advice.

Overtime and OBBBA in South Carolina

Does South Carolina tax my overtime in 2026?
Yes. South Carolina doesn't let the OBBBA deduction reduce its own tax for 2026, so it still applies its income tax (1.99%–5.21%) to those hours: you get $1,020 back federally while South Carolina takes $390 of the very same hours.
So is overtime actually tax-free?
Not quite, and the name oversells it. The deduction covers only the PREMIUM half of time-and-a-half, caps at $12,500 for a single filer, phases out above $150,000 of income, and never touches FICA: in this example you pay $450 in Social Security and Medicare on those hours regardless.
What do I actually save in South Carolina?
On $63,750 of straight-time pay plus $5,885 of overtime premium: $1,020 off your federal bill, less $390 that South Carolina takes. Real net effect of the deduction: $629.
Where does this show up on my W-2?
Your employer reports qualified overtime in W-2 box 12 under code TT. That figure is what carries to Schedule 1-A; if the box is empty, ask your employer to correct it before you file.

Compare with nearby states

North Carolina 3.99%Georgia 4.99%Tennessee no taxFlorida no taxAlabama 2%–5%All states

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