How is crypto taxed in South Carolina?

South Carolina crypto tax follows the federal approach and then applies a generous break for long-term gains. The IRS treats crypto as property, so selling, swapping or spending it can create a capital gain, and crypto received as pay or rewards is income. The federal rules are in how crypto is taxed in the US.

Does South Carolina tax crypto?

Yes. For 2025, the Department of Revenue's SC1040 instructions start from the taxable income on your federal return. Crypto gains and income are already in that number, and the instructions do not mention virtual currency or set a separate rule for it.

The IRS lists what counts. Trading coins, cashing out to dollars, paying for goods with crypto and receiving crypto for work, mining or staking are taxable events. Buying with dollars and holding is not, and moving coins between your own wallets is generally not reportable unless a fee is paid in crypto.

How does the South Carolina capital gains deduction apply to crypto?

The 2025 instructions reduce net capital gains included in taxable income by 44%. Net capital gain means net long-term gain minus net short-term loss, and the holding period must be more than one year. The department's example is a $2,000 net capital gain producing an $880 deduction.

The instructions do not name crypto, but because crypto is property for tax purposes, a net gain on coins held longer than a year generally falls under the same rule. Only 56% of that gain is then taxed. Short-term gains on coins held a year or less get no deduction. The fiscal impact statement for H.4216 says all other current state deductions are retained, which points to the 44% deduction continuing for 2026. How losses interact with gains is covered in crypto losses and taxes.

What is the South Carolina crypto tax rate?

For 2025, the top marginal rate is 6%, and the fiscal impact statement describes the brackets as 0%, 3% and 6%.

From tax year 2026, H.4216 replaces them. The department says income under $30,000 is taxed at 1.99%, and income of $30,000 or more at 5.21% minus $966, as the 2026 tax tables show. The starting point becomes federal adjusted gross income. Federal standard and itemized deductions are replaced by a new SC Income Adjusted Deduction of $15,000 for single filers and $30,000 for joint filers, which phases out between $40,000 and $95,000 of federal adjusted gross income for single filers.

From 2027, rates fall further in years when revenue is projected to grow at least 5%, with the goal of cutting 5.21% to 1.99% and then removing the 1.99% rate. The bill does not affect 2025 returns, which the department extended to October 15, 2026. Other states are compared in do states tax crypto.

Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.