Important Changes to Know about in South Carolina for 2026

As 2026 approaches, residents of South Carolina can expect several important changes at both the state and federal levels. From tax updates and new withholding rules to adjustments in state budgets, DMV procedures, and business liability laws—the coming year will bring shifts that may affect families, workers, businesses, and property owners. At The Floyd Law Firm, we believe in preparing our clients with reliable information so they can make informed decisions and plan ahead with confidence.

One of the biggest changes coming involves federal tax rules. For the 2026 tax year, which will be filed in 2027, the IRS is increasing the standard deduction to $32,200 for married couples filing jointly and $16,100 for single filers. Heads of household will see their deduction rise to $24,150. Taxpayers aged 65 or older will continue to receive an additional deduction based on inflation adjustments. The federal income tax brackets will also shift, with updated thresholds that reflect inflation and affect how much income is taxed at each bracket. For families, retirees, and business owners, these adjustments can influence financial planning, retirement contributions, and withholding choices—making early preparation especially valuable.

Alongside federal changes, South Carolina will introduce updated state withholding tables beginning January 1, 2026. Employers across the state must adopt the new tables at the start of the year to ensure the proper amount is withheld from employees’ paychecks. Individuals are encouraged to review their withholding whenever major life events occur, such as marriage, divorce, the birth of a child, changes in income, or adjustments in itemized deductions. A new South Carolina W-4 form will also be released, and taxpayers should complete a revised form if starting a new job or updating their withholding for the year.

Another notable update for 2026 involves the SCDMV. Beginning January 5, 2026, the agency will transition to a new official website address: dmv.sc.gov. This shift is intended to give residents greater confidence that they are interacting with the legitimate state site—an important improvement given the growth of online scams impersonating government agencies. The current website and email addresses will continue to redirect for at least a year, but the new domain will better align SCDMV services with other official South Carolina government sites. As always, the agency encourages residents to remain cautious and verify that they are accessing secure and authentic online services.

In addition, many South Carolina residents may already be familiar with the federal requirement for a REAL ID — a driver’s license or identification card marked with a gold star. Under the federal law, to use your South Carolina license or ID for certain purposes—such as boarding a domestic commercial flight, entering secure federal buildings, or visiting military installations—you must have a REAL ID (gold-star) license or present another acceptable federal ID (like a U.S. passport or military ID).

Although the REAL ID requirement was triggered beginning May 7, 2025, it remains important as you manage your licensing or registration tasks with the SCDMV. If you plan to travel by air or need access to secure federal facilities, double-check that your license bears the gold star. If not, consider updating to a REAL ID license. (Note: a REAL ID license is valid up to eight years, and while it adds the federal-ID capability, it does not confer any special driving privileges beyond a standard license.)

This update to SCDMV’s website and ongoing REAL ID compliance emphasize the importance of vigilance and authenticity when conducting vehicle or identification tasks online.

South Carolina’s fiscal year 2026 budget also reflects several statewide priorities. The $39.2 billion budget invests heavily in education, public safety, infrastructure, and disaster preparedness. It includes funds to expand full-day four-year-old kindergarten, maintain a school resource officer in every public school, and sustain a tuition freeze for in-state students at public colleges for the sixth consecutive year. Infrastructure funding will support bridge repair and replacement, while public safety agencies will see increased resources for officer hiring, overtime, and corrections staffing. The state also continues its phased reduction of individual income tax rates, moving toward a 6.0% rate. Together, these investments reflect a long-term focus on strengthening communities and supporting workforce development across the state.

Business owners—particularly those in the restaurant, bar, and hospitality industries—should be aware of significant changes to South Carolina’s liquor liability laws that take effect on January 1, 2026. Under the new rules, establishments that overserve customers who later cause injuries will no longer face unlimited liability if found even slightly at fault. Instead, when both the impaired driver and the establishment share responsibility, the business’s liability will be capped at 50% of the plaintiff’s actual damages. Although businesses must still carry at least $1 million in liquor liability insurance, new credits may allow some reduction in coverage requirements, though never below $300,000. These adjustments aim to balance accountability with fairness, particularly for small businesses that have struggled under the previous system.

As these wide-ranging changes unfold, many individuals and businesses will have questions about how new regulations, tax rules, or state policies may affect their planning in the year ahead. Whether you are reviewing your estate plan under new tax thresholds, preparing for compliance obligations in your business, or simply making sure your family is ready for the year’s transitions—The Floyd Law Firm is here to provide trusted guidance. For more than 50 years, our attorneys have helped South Carolinians along the Grand Strand with a variety of legal services.