Various groundwater table levels in paddy soil aggravate the complexity of soil organic carbon (SOC) sequestration under redox conditions. We investigated a long-term experimental field consisting of two groundwater tables (SWT, shallow groundwater table; DWT, deep groundwater table) and three straw application rates (NPK, without straw return; LOM, low rate of straw return; HOM, high rate of straw return). Soil samples from 0–10, 10–20 and 20–40 cm soil layers were collected and analyzed. Results revealed that SOC fraction contents significantly decreased with increasing soil depth, while SOC stability showed an opposite trend (P < 0.05). In the 0–20 cm soil layer, straw return increased SOC fraction concentrations, resulting in higher C stocks. In the 20–40 cm soil layer, a significant decrease in SOC was explained by remarkable MOC reduction with straw addition under SWT (P < 0.05), whereas no significant changes were observed under DWT. Relative to NPK, straw application notably increased the proportions of O-alkyl C and Carbonyl C under SWT and DWT in topsoil layer, respectively (P < 0.05). In the deep soil layer, straw addition increased Aromatic C but decreased O-alkyl C proportions under SWT, resulting in higher aromaticity and hydrophobicity (P < 0.05), while contrasting changing patterns were observed under DWT when compared to NPK. Hierarchical clustering analysis indicated that soil properties and SOC dynamics were primarily determined by straw return under SWT, while mainly driven by soil depth under DWT. This study highlights the importance of understanding the dynamics of SOC throughout the whole profile to groundwater table management. A preferable straw return strategy is proposed for different groundwater management based on the trade-off between economic and environmental benefits. A lower straw return amount was suggested under SWT from an economic perspective, whereas a higher straw return amount was recommended under DWT treatment for the higher increase of SOC.