Gambling winnings tax in South Carolina

South Carolina taxes your gross gambling winnings and allows no deduction for losses, so a losing year can still produce a state tax bill.

Checked against South Carolina’s own sources on 2026-09-11.

In short

From 2026 South Carolina’s Income Adjusted Deduction gets smaller as your federal AGI rises. If a win raises your federal AGI, it can shrink that deduction.2
For tax years that begin after 2025, South Carolina no longer lets casual gamblers deduct gambling losses. Lists that still show a South Carolina loss deduction are out of date for 2026.
The rules for tax year 2025 are not settled. A conformity act could still change them after the fact.

How South Carolina treats gambling losses

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South Carolina does not let a casual gambler offset winnings with losses at all, so how you file federally makes no difference to the state figure.

The two examples below are the same numbers the calculator uses, worked at South Carolina rates.

Two examples, worked at 2026 South Carolina rates

A single filer with $60,000 of other income who takes the standard deduction on everything except gambling losses.

A losing year

You win $50,000 and lose $52,000, so you finish down $2,000.

Federal: $3,596
South Carolina: $3,103
Total: $6,699

You finished the year down and still owe tax.

Federally you itemize, so your losses offset your winnings, but the 2026 rule caps that deduction at 90 percent and leaves $3,200 taxable. South Carolina starts from your federal income and allows no deduction for gambling losses, so the full $50,000 is taxed at 5.21 percent, plus $498 because the win shrinks your South Carolina Income Adjusted Deduction, which comes to $3,103.

A winning year

You win $50,000 and lose $10,000, so you finish up $40,000.

Federal: $10,350
South Carolina: $3,103
Total: $13,453

Federally you take the $16,100 standard deduction, which is worth more than itemizing, so your gambling losses do not reduce your federal tax at all. South Carolina starts from your federal income and allows no deduction for gambling losses, so the full $50,000 is taxed at 5.21 percent, plus $498 because the win shrinks your South Carolina Income Adjusted Deduction, which comes to $3,103.

South Carolina income tax rates, 2026

Taxable income	Rate
$0 to $30,000	1.99 percent
$30,000 and above	5.21 percent

The calculator also applies what this table leaves out: the South Carolina Income Adjusted Deduction, which falls at higher incomes, taken before the table.

Withholding on winnings

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South Carolina withholds 5.21 percent. The rule in the state's sources:

the state lottery, other lotteries, sweepstakes and wagering pools, pari-mutuel wagering, slot machines, keno and bingo, sports wagering, poker tournaments and other wagers: $500 or more (on any prize or winnings, paid to a resident or a nonresident).

Withholding is a credit against the bill, not the bill itself. It does not settle what you owe.

The federal 90 percent loss limit in South Carolina

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From tax year 2026 the federal deduction for gambling losses is cut to 90 percent of what you lost, and never more than what you won. Public Law 119-21 did it, at section 70114(a), by rewriting 26 U.S.C. 165(d).

South Carolina allows no loss deduction at all, so the federal limit changes your federal bill and not your South Carolina bill.

South Carolina follows the federal code as it stood on 2024-12-31. The paragraph above says what this means for the federal 90 percent limit.

If you do not live in South Carolina

South Carolina source gambling winnings are taxable to a nonresident as other income on Schedule NR. Deductions are prorated by the South Carolina income ratio rather than matched to South Carolina winnings.

The calculator works the bill for somebody who lives in South Carolina. It does not apportion income between states, so a nonresident return is not what the figure above describes.

More about South Carolina

Gambling losses from 2026

South Carolina removed the loss deduction for casual gamblers for tax years that begin after 2025.

If you are a professional gambler, this change does not affect you, because your losses are inside adjusted gross income.

Some lists you find elsewhere still show South Carolina as a state that allows a deduction for gambling losses. Those lists are out of date for 2026.

From 2026 South Carolina adopts no itemized deduction (12-6-50(21)). The 2026 federal limit on itemized deductions (IRC 68) does not affect your South Carolina tax.

The Income Adjusted Deduction

From 2026 South Carolina gives a South Carolina Income Adjusted Deduction. It gets smaller in proportion as your federal AGI rises through a band, and the reduction is rounded down to $10:2

Filing status	Deduction	Gets smaller as federal AGI rises from	To
Single or married filing separately	$15,000	$40,000	$95,000
Head of household	$22,500	$60,000	$142,500
Married filing jointly	$30,000	$80,000	$190,000

If you file for tax year 2025

The rules for tax year 2025 are not settled. South Carolina extended the filing deadline for all 2025 individual returns to October 15, 2026, because its conformity to the federal code was unresolved. A conformity act could change the 2025 rules after the fact.

For tax year 2025 South Carolina allowed gambling losses only if you itemized on your federal return. It had three brackets at 0, 3 and 6 percent, with thresholds of $3,560 and $17,830.

Before 2026 South Carolina capped its state tax addback at the lesser of state and local tax paid or itemized deductions above the standard deduction. So large gambling losses could raise the addback. A 2026 return has no itemized deduction and no addback.5

Withholding

The withholding rate is equal to the top individual tax rate, which is 5.21 percent for 2026. No South Carolina Department of Revenue document prints the withholding rate itself as a number.7, 3

Forms for 2026

South Carolina has not yet published the 2026 SC1040 or its instructions. The 2026 figures in these notes come from the statute and Information Letter 26-20.

Form SC1040ES for 2026, revised October 2025, still prints the old three-bracket schedule. It was published before Act 110 and is no longer correct.

About this estimate

If you are 65 or older, the calculator takes off South Carolina’s $15,000 deduction for each person 65 or older, after the Income Adjusted Deduction. The law reduces it by any retirement income deduction you take, so with one the two together still come to $15,000.

Sources

Every figure above traces to a primary source: a statute, an administrative code, a state agency page, or official form instructions.

1. S.C. Code 12-6-1170(B): a deduction of up to $15,000 from the year a resident turns 65, $30,000 on a joint return where both spouses have turned 65, reduced by the retirement deductions (checked 2026-10-12)
2. SCDOR Information Letter 26-20, Act 110 of 2026, South Carolina Income Adjusted Deduction table and $10 rounding (checked 2026-09-24)
3. SC Information Letter 26-20, Act 110 of 2026 income tax changes (checked 2026-09-11)
4. H.4216 (Act 110 of 2026), IRC sections not adopted, and 12-6-1140(15)(b), the deduction reduced by the amount federal adjusted gross income exceeds each line (checked 2026-10-11)
5. S.C. Code Title 12 Chapter 6, Internal Revenue Code as amended through 2024-12-31 (checked 2026-09-11)
6. SCDOR individual income tax page (checked 2026-09-11)
7. S.C. Code Title 12 Chapter 8, 12-8-530(A), withholding at the maximum individual tax rate on prizes and winnings of $500 or more (checked 2026-10-11)
8. Schedule NR instructions (2025), gambling winnings as other income (checked 2026-09-11)

The federal rule, for the parts of this page that rest on it

9. Public Law 119-21 section 70114(a), which rewrote 26 U.S.C. 165(d) on wagering losses from tax year 2026 and sets out its text (checked 2026-10-18)

We could not confirm these from an official source: whether any city or county tax applies.