South Carolina · Residential Solar Tax Credit
Residential Solar Tax Credit in South Carolina (2026)
30% tax credit on the cost of installing solar panels on your home. South Carolina has a progressive income tax with a top rate of 5.21%, so a South Carolina filer's combined marginal rate on the next dollar at $59,318 of income is about 17.21% (12% federal + 5.21% SC).
2026 savings example for South Carolina
Planning estimate for a single filer earning $59,318 (South Carolina median household income in LevyIO's state dataset) who claims a $5,000 credit. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; SC tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$4,938
Federal savings
$4,938
$4,938 → $0 · 12% bracket
SC state savings
$0
Federal credit only; check for a state credit
Combined marginal rate
17.21%
Credits do not depend on the bracket
Federal × South Carolina marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The SC column is the state marginal rate at the midpoint of each range. A credit saves its face value regardless of bracket.
| Federal bracket | Gross income (single) | SC marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 1.99% | 11.99% | $1,000 |
| 12% | $28,500 - $66,500 | 5.21% | 17.21% | $1,000 |
| 22% | $66,500 - $121,800 | 5.21% | 27.21% | $1,000 |
| 24% | $121,800 - $217,875 | 5.21% | 29.21% | $1,000 |
| 32% | $217,875 - $272,325 | 5.21% | 37.21% | $1,000 |
| 35% | $272,325 - $656,700 | 5.21% | 40.21% | $1,000 |
| 37% | Over $656,700 | 5.21% | 42.21% | $1,000 |
Eligibility & forms
Homeowners who install solar energy systems
- Must own the system
- New or existing home
- 30% of cost
Federal forms: Form 5695
South Carolina filing notes
Do not use the older 6.4% South Carolina bracket table for tax year 2026 planning. H. 4216 starts from federal AGI, replaces federal deductions with the South Carolina Income Adjusted Deduction, keeps the 44% net capital gains deduction, and should be verified against SCDOR guidance before filing.
Common mistakes: Leasing vs owning solar; Not carrying forward unused credit.
Frequently asked questions
How much can the Residential Solar Tax Credit save a South Carolina taxpayer in 2026?
Credits reduce tax dollar-for-dollar. In LevyIO's example, a single filer with $59,318 of income (the South Carolina median household income in our state dataset) and a $5,000 credit would cut 2026 federal tax from $4,938 to $0, a $4,938 saving. Whether South Carolina offers a matching state credit depends on the SC return, so the estimate counts federal savings only.
What is the South Carolina income tax rate for 2026?
South Carolina has a progressive income tax with a top rate of 5.21%. The SC standard deduction in LevyIO's dataset is $8,350 single / $16,700 married. H. 4216 changed tax year 2026 rules: South Carolina starts from federal AGI, uses a South Carolina Income Adjusted Deduction, and applies 1.99% below $30,000 and 5.21% above $30,000 minus $966. 44% capital gains deduction. Social Security exempt.
Who qualifies for the Residential Solar Tax Credit in South Carolina?
Homeowners who install solar energy systems. The federal rules are the same in every state; the requirements are: Must own the system; New or existing home; 30% of cost. South Carolina filers should confirm on the SC return whether the state follows the federal treatment.
Which forms do I file to claim the Residential Solar Tax Credit?
Federal: Form 5695. South Carolina: check the South Carolina Department of Revenue instructions for the matching state schedule. Common mistakes: Leasing vs owning solar; Not carrying forward unused credit.
Residential Solar Tax Credit in other states
More South Carolina deductions and credits
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.