Government

House Passes Bill to Phase Out State Income Tax on Social Security Benefits

By Autumn Shelton, West Virginia Press Association
CHARLESTON, W.Va. – A bill to phase out the state’s income tax on Social Security benefits passed the House of Delegates on Thursday and is now on its way to the Senate for consideration.
As read by House Majority Leader Eric Householder, R-Berkeley, “The committee substitute for House Bill 4880 would reduce and eliminate the state income tax on Social Security benefits through a three-year phase in exemption – 35 percent beginning on Jan. 1, 2024, 65 percent beginning on Jan. 1, 2025, and 100 percent beginning Jan. 1, 2026.”
Householder added that this is for personal income tax Social Security benefits received by a taxpayer with a federal adjusted gross income that exceeds $100,000 for a married couple filing jointly, or $50,000 if single or married filing separately.
In 2019 a similar bill, HB 2001, was adopted, phasing out state income tax on Social Security benefits for those with a federal adjusted gross income of $100,000 or less if married filing jointly, or $50,000 or less if single or married filing separately. Following HB 4880’s passage, by a vote of 96-0, Del. Larry Kump,R-Berkeley, spoke regarding the bill.
“This issue regarding taxation on Social Security, or any pension or retirement program really grinds my gears, gives me legislative heartburn,” Del. Kump said. “We’ve been fooling around with this taxation issue on Social Security for many years now, and I’m grateful that we’re going to be doing some more on it. I wish we were doing it more quickly, taking care of the issue completely.”
Kump continued that many states do not tax Social Security benefits, and that he remains concerned about retired public employees and the “cost-of-living issue on their pensions.”
“But, that’s another issue,” he concluded.
During his State of the State address on Jan. 10, Gov. Jim Justice proposed eliminating the state’s income tax on Social Security benefits.
House Bill 4880 was introduced at his request, however, when the bill was initially introduced, it called for a 100 percent elimination of Social Security state income tax beginning Jan. 1, 2024.
A fiscal note submitted by the state’s Tax and Revenue Department, and attached to the bill, states that the Social Security tax elimination will reduce General Revenue Fund collections by over $37 million each year.