Working in South Carolina, Living in North Carolina: Who Gets the Tax?

Cross-border commuters between the Carolinas face a dual filing. South Carolina (work state) taxes the income earned there. North Carolina (residence state) taxes all your income—including the SC wages. The good news: NC grants a credit for taxes paid to SC, so you're not double-taxed on the same dollars.

File a non-resident SC return (Form SC1040NR) first, then your resident NC return (Form D-400) claiming the credit. Keep pay stubs and W-2s showing SC withholding. If SC withholding exceeds your SC liability, you'll get a refund; if NC liability (after credit) exceeds NC withholding, you'll owe. Pro tip: adjust withholding in both states to avoid April surprises.