Charleston, West Virginia – A bill advanced by the House Finance Committee in West Virginia is aiming to phase out the personal income tax on Social Security over a period of three years. This move comes in response to a call by Gov. Jim Justice to provide tax relief for seniors while also being cautious about the state’s budget.
House Finance Chairman Vernon Criss, R-Wood, explained that the approach of phasing tax cuts in has been customary and prudent. The estimated financial effect of fully eliminating income taxes on Social Security benefits is a little over $37 million, which is why the state is still monitoring the effects of other recent tax cuts and potential cuts.
According to the proposed legislation, the state would exempt individuals in higher tax brackets from being taxed on their Social Security benefits. This change would affect around 50,000 senior households, providing them with significant tax relief.
AARP has voiced its support for the proposed tax cut, with spokesman Tom Hunter emphasizing the importance of eliminating the tax on Social Security benefits to attract and retain retirees in the state. This sentiment is echoed by Delegate Daniel Linville, R-Cabell, who believes that the full exemption could be implemented immediately.
If passed, the bill would build on a 2019 law exempting Social Security income from personal income taxes for most West Virginians, particularly those in lower tax brackets, over a three-year phase-out period.
Overall, this move aims to provide tax relief for seniors while also addressing the state’s budget concerns, balancing the need for financial prudence with the desire to support West Virginia’s older population.