South Carolina 529 Plan: A Hidden Gem
Unlock major tax savings with the South Carolina 529 plan—ideal for high earners investing in their children's education.
Jun 5, 2025
4
Minutes
If you’re raising a family and building wealth in South Carolina, there’s a tax-smart strategy that often flies under the radar: the South Carolina 529 education savings plan.
Whether you’re a tech entrepreneur in Mount Pleasant, a physician in Greenville, or a consultant who just relocated to Hilton Head, South Carolina’s 529 plan isn’t just helpful—it’s one of the most generous in the country.
What Is a 529 Plan?
A 529 plan is a tax-advantaged investment account designed to help families save for education. Education Savings Plans cover future education expenses like tuition, books, and room and board.
Why the South Carolina 529 Plan Stands Out
The real magic of a South Carolina 529 for South Carolina residents? You get a state income tax deduction on contributions.
Plus your investments grow tax-deferred, and withdrawals for qualified expenses are completely tax-free.
Let me say that again: South Carolina offers unlimited state income tax deductions for 529 contributions. Even better? The deduction includes rollovers from other states’ 529 plans. Many states cap contribution deductions at a few thousand dollars per year. SC doesn’t.
Note: South Carolina caps total contributions at $575,000 per beneficiary in 2025. See plan rules for details.
A Real-World Example
Imagine you’ve just moved to Charleston from Northern Virginia. You already have 529 plans with $18,000 saved for your high school junior and $12,000 for your 8th grader.
This year, you also contribute $3,000 to each account.
$18,000 (rollover)
$12,000 (rollover)
$6,000 (new contributions)
Total SC Income Tax Deduction: $36,000
If your taxable household income is $250,000, your taxable income drops to $214,000. At South Carolina's top marginal tax rate of 6.2%, you save $2,232 in state taxes. That’s real money you could reinvest in your child’s future by boosting their 529 even more.
Contributions to a Future Scholar 529 plan are deductible from South Carolina income taxes, even if you don’t itemize.
Source: South Carolina Department of Revenue
What Can You Use 529 Money For?
529 plans are surprisingly flexible:
College tuition and fees
Room and board (if enrolled at least half-time)
Books, supplies, computers, and internet access
K–12 tuition (up to $10,000 per year)
Repaying student loans (up to $10,000 per beneficiary)
This isn’t just about college. It’s about opening options for your child’s future.
Our Take on 529 Investing
We recommend going directly through the SC Future Scholar plan—not the advisor-sold version. Why?
Lower fees
No commissions
Strong investment choices
We don’t take commissions or charge extra to help you navigate your 529. It’s part of our mission to help clients grow wealth in alignment with their values—and their children’s future.
Final Thoughts
For high-income professionals in South Carolina, 529 plans are more than a savings vehicle. They’re a strategic tool. Used well, they can ease the burden of future tuition, lower your state tax bill, and give your kids a powerful head start.
Strategic use of 529s is part of a long-term wealth plan.
