Bill review: SC H.4216 - Income Tax Reform (SC)

[DTrim99]

Bill Review: SC H.4216 - Income Tax Reform (Amended Feb 2026)

Reform ID: sc-h4216 | State: SC
Bill text: https://www.scstatehouse.gov/sess126_2025-2026/prever/4216_20260224.htm
Description: Replaces graduated income tax with two brackets (1.99%/5.21%), creates SCIAD deduction with phase-outs, and caps SC EITC at $200. Effective tax year 2026.

Merging this PR will publish the bill to the dashboard.

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What we model

Provision	Parameter	Current	Proposed
Tax Rate Structure	gov.contrib.states.sc.h4216.rates	Graduated (0% to 6.2%)	1.99% up to $30k, 5.21% above
SCIAD Deduction	gov.contrib.states.sc.h4216.sciad.*	Federal standard deduction	$15k single, $22.5k HOH, $30k joint (with phase-out)
EITC Cap	gov.contrib.states.sc.h4216.eitc.max	125% of federal (uncapped)	Maximum $200

Validation

External estimates

Source	Estimate	Period	Link
SC Revenue & Fiscal Affairs	-$308.7M	First year	Fiscal Note

PE vs External comparison

Source	Estimate	vs PE	Difference
PE (PolicyEngine)	-$397.9M	—	—
SC Fiscal Note	-$308.7M	+29%	PE higher

Verdict: PE estimate (-$398M) is 29% above the fiscal note (-$309M). This is within a reasonable range given data source differences (CPS microdata vs state tax return data). The previous estimate (-$163M) was recomputed with an updated dataset, bringing the result much closer to the official estimate. Remaining gap likely reflects differences in income distributions and SCIAD phase-out calculations.

Key results

Metric	Value
Revenue impact	-$397,937,527
Poverty rate	26.34% → 26.34% (no change)
Child poverty rate	No change
Winners	29.7%
Losers	13.3%

District impacts

District	Avg Benefit	Winners	Losers
SC-1	$341	31.2%	13.3%
SC-2	$223	30.5%	13.8%
SC-3	$214	28.1%	13.4%
SC-4	$229	30.7%	12.9%
SC-5	$58	29.4%	13.4%
SC-6	$221	30.0%	12.2%
SC-7	$217	28.5%	13.7%

Reform parameters JSON

{
  "_use_reform": "sc_h4216",
  "gov.contrib.states.sc.h4216.in_effect": {
    "2026-01-01.2100-12-31": true
  }
}

This reform uses a structural reform class in policyengine-us that implements:

• New tax brackets (Section 1)
• SCIAD deduction with phase-outs (Section 3)
• EITC $200 cap (Section 7)

Versions

• PolicyEngine US: policyengine-us with sc_h4216 structural reform
• Dataset: policyengine-us-data (updated March 2026)
• Computed: 2026-03-18

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