Status
State backup withholdingRequiredPrimary source (statute, regulation or agency publication saved in full)
Non-wage payments to nonresidentsRequiredPrimary source (statute, regulation or agency publication saved in full)
Federal backup withholding under IRC 3406 (24 percent on a missing or mismatched TIN) applies in South Carolina exactly as everywhere else; this page covers only what the state adds. The 50-state tables put South Carolina next to its neighbours, and the South Carolina 1099 filing page covers whether the state wants its own copy of the 1099.
State backup withholding
Trigger
S.C. Code 12-8-595(A): a withholding agent paying compensation to an individual that is reported on Form 1099 must withhold when the individual (1) failed to provide a taxpayer identification number or social security number, (2) failed to provide a correct one, or (3) provided an IRS number issued for nonresident aliens (an ITIN). The agent is not in violation if the number given is facially correct and a reasonable investigation would not have shown it to be false (12-8-595(C)).
Rate
The same rate as the maximum South Carolina individual income tax rate (12-8-595(A), as amended by 2024 Act No. 215, which replaced the former flat 7 percent). The statute does not state the percentage; confirm the current year's top rate with SCDOR.
Statute
S.C. Code 12-8-595 (Withholding on wages paid to individual failing to provide taxpayer identification number or social security number); 2008 Act No. 280; 2024 Act No. 215, s. 5
Withholding return and forms
The statute names no separate form. South Carolina withholding agents deposit with their regular withholding and file Forms WH-1605 (quarters 1 to 3) and WH-1606 (fourth quarter and annual), with the 1099 copies transmitted on WH-1612; confirm with SCDOR that the 12-8-595 withholding is reported the same way.
Deposit schedule
Same as the agent's other South Carolina withholding (quarterly if under $500 a quarter, monthly if $500 or more)
Annual reconciliation
Form WH-1606 by January 31, with WH-1612 and the 1099 copies
Payee statement
Federal Form 1099 showing the South Carolina withholding
Exemptions
A withholding agent exempt from federal withholding for the individual under a properly filed IRS
Form 8233, with a copy provided to the commissioner (12-8-595(B)); facially correct numbers the agent had no reason to doubt (12-8-595(C))
Withholding on non-wage payments to nonresidents
Applies to
(1) Nonresidents (individuals or entities) hired or contracted to conduct business or perform personal services of a temporary nature in SC (12-8-550). (2) Nonresident individuals, partnerships, trusts, estates and nonresident corporations/entities receiving rent or royalty payments for property in SC (12-8-540). (3) Nonresident beneficiaries of trusts/estates (12-8-570, out of scope).
Threshold
Contracts: SC portion of the contract exceeds or is reasonably expected to exceed $10,000. Rents/royalties: $1,200 or more in the calendar year.
Rate
Contracts: 2% of each payment. Rents/royalties: a percentage equal to the maximum individual tax rate (2024 Act 215 is phasing the top rate down; the statute states no percentage, so confirm the current year's figure with SCDOR) for nonresident individuals/partnerships/trusts/estates, 5% for nonresident corporations and other entities.
Statute
S.C. Code 12-8-550 (contracts), 12-8-540 (rent/royalty), 12-8-560 (exemptions and waivers), 12-8-1520/1530/1550 (deposit, quarterly return, annual reconciliation)
Withholding return
Withholding deposited with the agent's other withholding on the regular deposit schedule; WH-1605 (Q1-Q3) and WH-1606 (Q4/annual) quarterly returns; WH-1612 transmittal with W-2/1099 copies
Exemption certificate or waiver
Form I-312 (Nonresident Taxpayer Registration Affidavit Income Tax Withholding) retained by the hiring party, not mailed to SCDOR; I-41 and I-309 for rent/royalty and trust situations
Payee statement
Federal Form 1099 (
1099-NEC/MISC) showing SC withholding, filed with WH-1612/annual return
Due dates
2% contract withholding deposited with regular employer withholding; nonresident withholding agents: quarterly if under $500/quarter (last day of month after quarter), monthly if $500 or more (15th of following month); quarterly returns due last day of month following quarter; WH-1606 annual by January 31
Exceptions
Nonresident registered with the SC Secretary of State or SCDOR who provides affidavit I-312 (agrees to SC jurisdiction); payments on purchase orders for tangible personal property without services performed in SC; department may waive withholding against a bond, securities or cash deposit (12-8-560); rent exemptions for 4 or fewer residential units and personal residence rent
Pass-through entity withholding (out of scope)
Separate 12-8-590 withholding on S corporation and partnership distributions to nonresident owners (5%). Entity-level withholding on distributions to nonresident owners is a duty of the entity, not of a payer, and is not covered on this page.
From the source
“shall withhold state income tax at the same rate as the maximum individual income tax rate of the amount of compensation paid to an individual”
S.C. Code 12-8-595(A), read November 1, 2026
“shall withhold two percent of each payment in which the South Carolina portion of the contract exceeds”
S.C. Code 12-8-550(A), read November 1, 2026
What to confirm
- The 12-8-595 rate is defined as the maximum individual income tax rate, which 2024 Act 215 is phasing down; the statute does not state a percentage. The same definition governs the rent and royalty rate under 12-8-540. Confirm the current year’s figure with SCDOR before withholding.
- The statute names no separate return for 12-8-595 withholding; the forms listed are the agent’s regular South Carolina withholding returns.
Sources
Each source below was read and saved on November 1, 2026; the page is built from the saved text. Statutes are cited to the section; department pages and publications to their title and, where shown, revision date.