South Carolina State Expat Tax Requirements: Do I Still Need to File?
South Carolina collects $4,375 per capita in state and local taxes, making it one of the more affordable states for tax obligations. However, South Carolina is notorious for requiring extensive documentation to prove non-residency and may challenge residency claims years after the fact.
Yes, you likely still need to file South Carolina tax returns if you lived there before moving overseas, unless you’ve taken specific steps to prove you’ve abandoned South Carolina as your permanent home. South Carolina uses strict “intent” tests that focus heavily on whether you truly intended to make your new location permanent.
While South Carolina is thorough in their residency examinations, most expats can establish non-resident status with proper documentation and planning. Whether you’re behind on filing, recently moved abroad, or just discovered your South Carolina obligations, you can achieve peace of mind by taking the right steps now.
Am I Still Considered a South Carolina Resident for Tax Purposes?
South Carolina takes a comprehensive approach to residency determination, considering your intent and the center of your life, rather than just where you physically reside.
You’re considered a South Carolina resident if:
- You intend to maintain South Carolina as your permanent home, AND
- South Carolina is the center of your financial, social, and family life, AND
- When you’re away, South Carolina is the place to which you intend to return
You’re a non-resident if:
- Your permanent home is outside South Carolina all year, AND
- None of the above resident factors applies to your situation
The challenge: South Carolina specifically targets expats who moved away “for a temporary or indefinite period of time without intent of making the new place [your] home.” The burden of proof is on you to demonstrate your move was permanent.
If you’ve maintained any South Carolina connections or expressed any intention to return potentially, South Carolina likely still considers you a resident subject to worldwide income taxation.
How Does South Carolina Determine If My Move Was Permanent?
South Carolina examines an extensive list of factors to determine if you’ve truly established a new permanent home or if your move abroad is temporary.
Factors that suggest you’re still a South Carolina resident:
- Address on legal documents (deeds, wills, contracts)
- Current South Carolina driver’s license or ID card
- South Carolina voter registration
- Vehicle registration in South Carolina
- Bank accounts, investment accounts, or credit cards with South Carolina addresses
- Professional or trade licenses in South Carolina
- Spouse or family members still living in South Carolina
- Property ownership in South Carolina
- Business connections and relationships in South Carolina
- Maintaining South Carolina professional services (doctors, lawyers, accountants)
- Public library cards or other privileges requiring South Carolina residency
- Civic ties, social memberships, or place of worship in South Carolina
Evidence that helps establish non-residency:
- Formal documentation of permanent employment abroad
- Long-term housing arrangements in your new country (purchase or multi-year lease)
- Moving spouse and children abroad
- Obtaining foreign residency status or work visas
- Establishing bank accounts, professional relationships, and social connections abroad
- Canceling South Carolina driver’s license and voter registration
- Obtaining a driver’s license and registering to vote in a new location
Real example: Patricia moved to Singapore for what she described as a “multi-year assignment” but kept her Charleston home, South Carolina bank accounts, and voter registration. She told colleagues she planned to return “eventually.” After four years, South Carolina audited her and demanded taxes on her Singapore salary totaling $34,000 plus penalties. The key phrases that hurt her were “multi-year assignment” and “eventually,” which showed a temporary intent.
What’s the Three-Part Test for South Carolina Residency?
South Carolina’s residency test requires ALL three elements to be true for you to remain a resident:
1. Intent to maintain South Carolina as a permanent home
This is the most challenging element for expats. Any evidence suggesting you view South Carolina as your “true home” or plan to return can establish residency.
2. South Carolina is the center of financial, social, and family life
They examine where your most important relationships and financial interests are located.
3. South Carolina as the intended place of return
Even if you have lived abroad for years and want to return to South Carolina, rather than making your new location your permanent home, you remain a resident.
Success strategy: You must systematically address all three elements. Moving abroad alone isn’t sufficient – you must actively establish a new permanent home and sever ties to South Carolina that suggest a temporary departure.
Example: Michael moved to Germany with a five-year employment contract but told friends he was “testing the waters” and might return if he didn’t like it. He kept his Columbia home as a rental but stayed personally involved in tenant management. South Carolina successfully argued that he remained a resident because his intent was exploratory, not permanent.
What If I Have South Carolina Income But Live Abroad?
Even if you successfully establish non-resident status, you may still need to file South Carolina returns for income earned from South Carolina sources.
South Carolina-source income requiring non-resident filing:
- Wages, salary, or benefits from South Carolina employers
- Income from rental or tangible personal property located in South Carolina
- Business income carried on in South Carolina
- Investment income (interest, dividends, capital gains) from South Carolina businesses or property
- South Carolina lottery or bingo winnings
Example calculation: Lisa, who lives in France, owns a rental property in Greenville that generates an annual net income of $16,000. As a non-resident, she pays South Carolina tax only on this $16,000, not her French salary. Her South Carolina tax: approximately $800 annually (with the reduced 6.2% top rate for 2024).
Important exceptions:
- Investment income only requires filing if it comes from your business or property located in South Carolina
- Pension distributions from South Carolina sources are generally not taxable to non-residents under federal law
What Should I Do If I’m Behind on South Carolina State Filing?
Don’t panic if you’ve been living abroad and haven’t filed South Carolina returns. Most expats in similar situations can resolve their compliance issues through strategic planning.
Step 1: Document Your Intent
Gather evidence showing your move abroad was intended to be permanent, not temporary. This includes employment contracts, housing arrangements, family relocations, and statements about your long-term plans.
Step 2: Assess Your Residency Status
Determine whether South Carolina considers you a resident for each year in question. Many expats can establish non-resident status for some or all years, significantly reducing their liability.
Step 3: Calculate Potential Exposure
South Carolina’s top tax rate dropped to 6.2% for 2024, making it a relatively moderate rate. Factor in standard deductions and any applicable credits to determine actual liability.
Step 4: Consider Streamlined Filing
If your failure to file was non-willful (you didn’t know about the requirement), you may qualify for the IRS Streamlined Filing Compliance Procedures. This addresses federal obligations and provides a foundation for state compliance.
Step 5: South Carolina Voluntary Disclosure
South Carolina offers voluntary disclosure programs that can reduce penalties for taxpayers who come forward proactively before being contacted by the state.
Success story: James lived in Thailand for six years without filing South Carolina returns, thinking his teaching position abroad automatically ended his obligations. He owed an estimated $21,000 in taxes and penalties. By documenting his permanent intent to remain in Thailand and using voluntary disclosure, we reduced his liability to $8,500 and established clear non-resident status going forward.
How Can I Minimize My South Carolina State Tax Obligations?
Strategy 1: Establish Clear Permanent Intent
The most critical factor is proving your move abroad was intended to be permanent:
- Document long-term employment arrangements or business establishment abroad
- Establish permanent housing (purchase property or sign multi-year leases)
- Move immediate family members abroad
- Obtain foreign residency or work authorization status
- Make statements and take actions consistent with permanent relocation
Strategy 2: Systematically Sever South Carolina Ties
Address all factors South Carolina examines:
- Sell South Carolina property or convert to arm’s-length rental management
- Close South Carolina bank accounts and investment accounts
- Cancel South Carolina driver’s license, voter registration, and professional licenses
- Update all legal documents to reflect the new permanent address
- Establish primary professional relationships (medical, legal, financial) in the new location
Strategy 3: Alternative State Residency
Consider establishing residency in a no-income-tax state before moving abroad:
- States like Texas, Florida, or Nevada don’t impose income taxes
- This requires genuine relocation and establishment of ties, not just mailing addresses
- Often easier than proving abandonment of South Carolina residency from overseas
Strategy 4: Document Your New Permanent Home
Build comprehensive evidence of your new permanent residence:
- Join local organizations, clubs, or religious institutions
- Register children in local schools
- Establish local banking and professional relationships
- Obtain a local driver’s license and voter registration, where possible
- Create a paper trail showing integration into your new community
Will Federal Expat Tax Benefits Help with South Carolina State Tax?
Federal expat tax benefits provide some relief, but don’t eliminate South Carolina State obligations.
- Foreign Earned Income Exclusion (FEIE): For 2025, you can exclude up to $130,000 in foreign earned income from federal taxes. South Carolina conforms to some federal provisions, so this may reduce your South Carolina taxable income if you qualify and remain a resident.
- Foreign Tax Credit (FTC): This provides a dollar-for-dollar credit for foreign taxes paid against your federal liability. South Carolina doesn’t allow credits for foreign taxes paid, so this doesn’t directly help with state obligations.
Example: Robert earns $70,000 in New Zealand and pays $18,000 in taxes in New Zealand. For federal purposes, he excludes his entire salary and owes $0. For South Carolina (if he’s still considered a resident), he reports the income with potential federal conformity benefits but no credit for New Zealand taxes paid. His South Carolina tax: approximately $3,500.
This demonstrates why establishing non-resident status is crucial for South Carolina expats.
When Should I Get Professional Help?
Consider professional assistance if you:
- Maintained significant South Carolina ties while living abroad
- Own South Carolina property or have complex business interests there
- Have been living abroad without filing South Carolina returns for multiple years
- Made statements or took actions suggesting your move was temporary
- Face South Carolina tax assessments, audits, or collection actions
- Want to establish a proactive strategy for proving permanent departure
South Carolina’s focus on intent and comprehensive factor analysis makes professional guidance particularly valuable. Our state tax specialists regularly assist expats in resolving multi-year South Carolina compliance issues and building compelling cases for non-resident status.
What’s My Next Step?
- If you’re current on South Carolina filing: Review your residency status and consider whether you can strengthen your case for non-residency through changing your state residency while abroad.
- If you’re behind on filing: Don’t wait for South Carolina to contact you. Their detailed examination of residency factors means penalties and interest accumulate while they build stronger cases. Start with voluntary disclosure and residency assessment.
- If you’re unsure about your status: Get clarity now rather than hoping for the best. South Carolina’s comprehensive approach to residency determination means professional assessment can save significant money and stress.
- If you’re planning to move abroad: Take steps to establish clear permanent intent before you leave, ideally by establishing residency in a no-income-tax state first or building comprehensive documentation of permanent departure.
No matter how late, messy, or complex your South Carolina tax situation may be, we can help. You’ll have peace of mind, knowing that your taxes were done right.
If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.
Whether you’re years behind or just unsure about the thresholds, our team is ready to help.
This article is for informational purposes only and should not be considered legal or tax advice. Tax laws are complex and subject to change. Individual situations vary, and you should consult with qualified professionals for guidance specific to your circumstances.
