Cybersecdn– West Virginians who get Social Security may soon have a little extra cash because the House of Delegates passed a bill that could get rid of taxes on payments. This will happen over several years if Bill 458 passes the West Virginia Senate. It will stop taxing Social Security income at the state level. It was passed by the House of Delegates as HB 4880 and is now with the Senate Finance Committee.
The latest bill comes after a law passed in 2019 that started gradually getting rid of the income tax on Social Security payments for single filers making less than $50,000 a year and more than $100,000 a year for joint filers. Starting in 2020, the state gave qualified taxpayers a 35% tax break on benefits. It reached a high point of 100% in 2022, after going up to 65% in 2021.
The Social Security Administration (SSA) says that in 2024, Social Security payments will help about 68 million Americans. It is the biggest benefits scheme ever paid for by the government.
Some people in the state already don’t have to pay taxes on their Old Age, Survivors, and Disability Insurance (OASDI) or Supplemental Security Income (SSI) benefits. The proposed change will give all present and future residents who claim any SSA benefit the tax break.
The tax cut would be slowly put in place over three years, just like the 2019 bill. The amount will be cut by 35% in 2024, going back to January 1, then by 65% in 2025, and finally by 100% in 2026.
According to the Associated Press, Republican Governor Jim Justice had planned to get rid of all state taxes on Social Security in 2024. His plans are still mostly the same, but it will take longer to carry them out if the bill passes.
On January 8, Justice wrote on X, which used to be Twitter, that he had cut taxes “23 times” since he took office in 2017. One of the three changes he wanted to make in his yearly budget was a tax cut for Social Security. The other two were to add to the tax credit for childcare and make the homestead exemption bigger. Newsweek sent Justice an email outside of normal business hours to get a reaction.
West Virginia will become one of the few states in the U.S. that does not tax Social Security income at the state level if the bill passes. According to Bankrate, only 11 states still tax Social Security payments. These are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont.
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Other than the District of Columbia and some other states, OASDI can be taxed by the federal government everywhere in the U.S. SSI, on the other hand, is not taxed because it is given to people with very little or no income and resources.
