Live in South Carolina, Work in Nebraska: Which State Taxes Your Paycheck?
Answer
Nebraska withholds and South Carolina credits. Without an agreement between them, both states are entitled to tax income earned in Nebraska by a South Carolina resident. The mechanism that stops you paying twice is the credit on the South Carolina resident return, which is why the Nebraska return has to be completed first.
Last verified
Without an agreement between South Carolina and Nebraska, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Nebraska figure is an input to the South Carolina return, so completing South Carolina first means doing it twice.
A South Carolina resident taxed by another state on the same income claims the credit for taxes paid to other states on Form SC1040TC. The credit is capped at the South Carolina tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · NebraskaForm 1040N with Schedule III
File the Nebraska nonresident return FIRST — you need the Nebraska tax figure before you can complete South Carolina.
- 2Resident return · South CarolinaForm SC1040TC
File a South Carolina resident return reporting all income, then claim the credit for tax paid to Nebraska. The credit is capped at what South Carolina would have charged on that same income, so if Nebraska taxes it at a higher rate the difference is not refunded.
The two states, side by side
| South Carolina | Nebraska | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | Yes — general rule |
| Nonresident return | Form SC1040 with Schedule NR | Form 1040N with Schedule III |
| Credit for other-state tax | Form SC1040TC | Form 1040N Schedule II |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | South Carolina Department of Revenue | Nebraska Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Nebraska and working in South Carolina gives:Both states — credit offsets the double tax.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: South Carolina → NebraskaConvenience-of-the-employer rule — both states tax you
- 1099 contractor: South Carolina → NebraskaHome state, plus the client state if you work there
- Moved mid-year: South Carolina → NebraskaTwo part-year returns
Other South Carolina pairs
Questions people actually ask
I live in South Carolina and work in Nebraska. Which state takes the tax out of my paycheck?
Nebraska withholds and South Carolina credits. Without an agreement between them, both states are entitled to tax income earned in Nebraska by a South Carolina resident. The mechanism that stops you paying twice is the credit on the South Carolina resident return, which is why the Nebraska return has to be completed first.
Which state should my employer be withholding for?
Nebraska. The wages are sourced to Nebraska, so Nebraska withholding is correct and there is no South Carolina withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. South Carolina gives residents a credit for tax paid to Nebraska on the same income, claimed on Form SC1040TC. The credit is capped at the South Carolina tax on that income, so if Nebraska taxes it more heavily the excess is not refunded by either state.
How current is this?
The South Carolina and Nebraska rules on this page were last checked against South Carolina Department of Revenue and Nebraska Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- South Carolina Department of Revenue — individual income taxaccessed 2026-08-07
- Nebraska Department of Revenue — individual income taxaccessed 2026-08-07