Column: Our state is increasingly attractive to military retirees

South Carolina is historically a military-friendly state. And it's getting more that way.

With May being Military Appreciation Month, the personal-finance website WalletHub released its report on the Best & Worst States for Military Retirees in 2024. https://wallethub.com/edu/best-states-for-military-retirees/3915

South Carolina ranks No. 1, best in the nation.

WalletHub compared the 50 states and the District of Columbia across 28 key indicators of retirement-friendliness for veterans. The data set ranges from job opportunities for veterans to housing affordability to the quality of VA hospitals.

Military retirement in South Carolina (1=best; 25=average):

1. Overall rank: 1st

2. 7th - Veterans per capita

3. 18th - Percent of homeless veterans

4. 25th - Housing affordability

5. 4th - Percent of veteran-owned businesses

6. 9th - Number of VA benefits-administration facilities per number of veterans

7. 4th - Quality of VA hospital

South Carolina is home to eight major military installations and more than 344,000 veterans. The state has the 15th-highest veteran population.

In 2022, the state took another step to boost its military connection and attractiveness to military retirees.

Gov. Henry McMaster signed the Workforce Enhancement and Military Recognition Act, which exempts all military retirement pay that is included in South Carolina taxable income from the state's income tax, no matter the taxpayer's age. The deduction also can be claimed by a surviving spouse.

According to the SCDVA, military retirees can start, stop or change State Income Tax Withholding (SITW) by using myPay, filling out a DD Form 2866 Retiree Change of Address/State Tax Withholding Request, or sending a written request that includes all of the necessary information. If they choose to send a DD Form 2866 or a written request, mail to: Defense Finance and Accounting Service, U.S. Military Retirement Pay, 8899 E 56th Street, Indianapolis, IN 46249-1200. Do not send either document to the S.C. Department of Revenue.

Other military-related income tax exclusions offered by the state are:

Any federal tax-exempt pension or compensation provided by the U.S. Department of Veterans Affairs.

Combat pay and certain benefits not included in federal taxable income.

Retirement income paid by the U.S. government for service in the Reserves or National Guard.

Income received for service in the National Guard or the Reserves for customary annual training, weekend drills and other inactive duty training.

Service pay for non-resident military personnel on active duty in South Carolina who are legal residents of other states.

The state also offers property tax exemptions to veterans deemed totally and permanently service-connected disabled.

Military tax deductions and exemptions are another important way in which South Carolina serves the nation well by accommodating our military and those serving and having served.

This editorial was originally published by the Times and Democrat on May 23.