South Carolina Annuities

Top MYGA Rates Available in South Carolina

Rates are subject to change and are not guaranteed until a policy is issued and accepted. Not FDIC-insured. Not a deposit. Guarantees are subject to the claims-paying ability of the issuing insurer. Product availability varies by state.

Tax information is compiled from publicly available state sources and was last reviewed in June 2026. Verify current rules with the state revenue department or a qualified tax professional.

How South Carolina taxes annuity income

South Carolina applies graduated income tax rates with a top rate of 6.2% (on a legislated schedule of reductions) to the taxable portion of annuity distributions — but layered deductions substantially soften the bill for retirees:

Retirement income deduction: up to $3,000 per year of qualified retirement income (pension, annuity, IRA, 401(k)) for taxpayers under 65, rising to $10,000 per year at age 65.
Senior deduction: taxpayers 65 and older may also claim a separate deduction of up to $15,000 against any income ($30,000 for a couple), reduced by the retirement deduction claimed.

South Carolina does not tax Social Security benefits. Combined, a 65+ couple can shelter a meaningful share of annuity income each year. Federal income tax and the 10% federal early-withdrawal penalty (before age 59½) apply as usual. Verify current deduction amounts with the SC Department of Revenue.

Source: South Carolina Department of Revenue — Individual Income Tax

This information is for general educational purposes only and does not constitute tax advice. Tax laws change frequently. Consult a qualified tax professional for advice specific to your situation. Annuity.com does not provide tax, legal, or accounting advice.

Regulatory information is summarized from official state sources cited below and was last reviewed in June 2026. Always verify current requirements with the South Carolina Department of Insurance.

South Carolina Annuity Regulations

Free Look Period: At least 10 days; see your contract's cover page

South Carolina annuity contracts include a free look period — a window after delivery during which you may return the contract for a full refund with no surrender charges. The minimum period is at least 10 days for most contracts, with the exact terms stated on your contract's cover page.

Carriers may offer longer periods than the state minimum. Confirm current requirements with the South Carolina Department of Insurance.

Source: South Carolina Department of Insurance — consumer resources

Best Interest Standard: Adopted — effective November 27, 2022

Effective November 27, 2022, South Carolina holds producers to the NAIC best-interest standard of conduct when recommending an annuity (S.C. Code Ann. Regs. 69-29). The producer must act in the consumer's best interest — satisfying care, disclosure, conflict-of-interest, and documentation obligations — and may not place their own financial interest ahead of the consumer's. Producers must complete a 4-hour best-interest training course before selling annuities, and insurers must maintain supervision systems.

Source: S.C. Code Ann. Regs. 69-29 — South Carolina Department of Insurance

Replacement Rules

South Carolina requires consumer protections when an existing annuity or life insurance policy is replaced:

A written replacement notice identifying the contracts being replaced and disclosing surrender charges, benefits, and features being given up.
Notification to the existing insurer.
A documented best-interest basis for the recommendation under S.C. Code Ann. Regs. 69-29.

Source: South Carolina Department of Insurance — consumer resources

Regulatory information is summarized for educational purposes and may not reflect the most recent legislative or administrative changes. This content does not constitute legal advice. Consult the South Carolina Department of Insurance or a qualified insurance professional for the most current requirements.

Frequently Asked Questions

Does South Carolina tax annuity income?

Yes, at graduated rates topping out at 6.2% (declining) — but retirees get layered deductions: up to $10,000 of retirement income at 65+ (annuity, pension, IRA), plus a separate senior deduction of up to $15,000. Social Security is not taxed.

How much retirement income can a 65-year-old South Carolinian deduct?

Up to $10,000 of qualified retirement income, plus up to $15,000 under the separate age-65 deduction (reduced by the retirement deduction claimed). A 65+ couple can shelter a substantial amount of annuity income annually. Source: SC Department of Revenue.

What is the free look period for annuities in South Carolina?

South Carolina annuity contracts include a free look period of at least 10 days for most contracts, with the exact period stated on your contract's cover page.

Does South Carolina require annuity agents to act in my best interest?

Yes. Effective November 27, 2022, South Carolina holds producers to the NAIC best-interest standard (S.C. Code Ann. Regs. 69-29). Agents must act in the consumer's best interest and complete a 4-hour best-interest training course.

How do I verify a South Carolina annuity agent's license?

Use the South Carolina Department of Insurance license lookup at doi.sc.gov to confirm any agent holds an active South Carolina insurance license.