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Live in South Carolina, Work in Virginia: Which State Taxes Your Paycheck?

Both states — credit offsets the double taxVirginia withholds

Answer

Both states tax the same wages, and a credit undoes the overlap. Virginia withholds as your work state and you file a Virginia nonresident return; South Carolina taxes residents on all income, so you also file at home and claim the credit for tax paid to Virginia. File Virginia first.

Last verified

Without an agreement between South Carolina and Virginia, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Virginia 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

  1. 1Nonresident return · VirginiaForm 763

    File the Virginia nonresident return FIRST — you need the Virginia tax figure before you can complete South Carolina.

  2. 2Resident return · South CarolinaForm SC1040TC

    File a South Carolina resident return reporting all income, then claim the credit for tax paid to Virginia. The credit is capped at what South Carolina would have charged on that same income, so if Virginia taxes it at a higher rate the difference is not refunded.

The two states, side by side

 South CarolinaVirginia
Taxes wagesYes — graduatedYes — graduated
Reciprocity partnersNone5 (Form VA-4)
Convenience ruleNoNo
Nonresident returnForm SC1040 with Schedule NRForm 763
Credit for other-state taxForm SC1040TCSchedule OSC
Nonresident safe harbourNone publishedNone published
Local income taxNoNo
Revenue departmentSouth Carolina Department of RevenueVirginia Department of Taxation
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Virginia and working in South Carolina gives:Both states — credit offsets the double tax.

Virginia to South Carolina →

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.

Other South Carolina pairs

Questions people actually ask

I live in South Carolina and work in Virginia. Which state takes the tax out of my paycheck?

Both states tax the same wages, and a credit undoes the overlap. Virginia withholds as your work state and you file a Virginia nonresident return; South Carolina taxes residents on all income, so you also file at home and claim the credit for tax paid to Virginia. File Virginia first.

Which state should my employer be withholding for?

Virginia. The wages are sourced to Virginia, so Virginia 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 Virginia on the same income, claimed on Form SC1040TC. The credit is capped at the South Carolina tax on that income, so if Virginia taxes it more heavily the excess is not refunded by either state.

How current is this?

The South Carolina and Virginia rules on this page were last checked against South Carolina Department of Revenue and Virginia Department of Taxation 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.