Social Security recipients in West Virginia may soon be able to look forward to a little extra cash in their pockets as the House of Delegates has passed a bill that could see taxes on benefits eliminated.
State-level taxes on Social Security income will be phased out over a number of years if bill 458 passes the West Virginia Senate. It is currently with the Senate Finance Committee after being passed in the House of Delegates as HB 4880.
The latest bill follows legislation enacted in 2019 that began the gradual elimination of income tax for Social Security benefits for single filers with incomes below $50,000, and $100,000 for joint filers. The state provided a 35 percent exemption on benefits for eligible taxpayers starting in 2020. It rose to 65 percent as of 2021 and culminated at 100 percent in 2022.
Social Security benefits will assist an estimated 68 million Americans in 2024, according to the Social Security Administration (SSA). It is the largest state-funded benefits program in history.
What Does the Bill Entail?
While some benefit claimants in the state are already not required to pay taxes on their Old Age, Survivors and Disability Insurance (OASDI) or Supplemental Security Income (SSI) benefits, the proposed change will extend the tax break to all current and future residents who claim any SSA benefit.
Like the 2019 bill, the tax reduction would be gradually introduced over three years. It will be cut by 35 percent in 2024, retroactive to January 1, 65 percent in 2025, and eliminated entirely in 2026.
It comes after Republican Governor Jim Justice planned to eliminate state taxes on Social Security entirely in 2024, according to the Associated Press. While his plans have not been eroded entirely, they will take longer to be fully implemented if the bill is passed.
Writing on X, formerly Twitter, in January, Justice said he had cut taxes "23 times" since taking office in 2017. The Social Security tax cut is one of three he proposed in his annual budget, the other two being an addition to childcare tax credit and an expansion of the homestead exemption. Newsweek has reached out to Justice for comment via email outside normal working hours.
We've cut taxes 23 times since I took office in 2017, and this year I proposed three additional tax cuts in my budget: eliminating the tax on social security, a childcare tax credit, and an expansion to the Homestead exemption. pic.twitter.com/CQCW7bAN9N
— Governor Jim Justice (@WVGovernor) January 12, 2024
If the bill passes, West Virginia will join the majority of U.S. states that do not levy state-level taxes on Social Security income. Currently, only 11 states still enact taxes on Social Security benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont, according to Bankrate.
While state-level taxes are not in place across all other states and the District of Columbia, OASDI can be taxed by the federal government across the entirety of the U.S. SSI, which is given to those with extremely low or no income and resources, is not taxable.
Uncommon Knowledge
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About the writer
Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on issues across the U.S., including ... Read more
