Charleston, West Virginia – More than 50,000 senior citizen households in West Virginia stand to benefit from the proposed elimination of the state’s income tax on Social Security benefits. Governor Jim Justice put forward this proposal during his State of the State address in January, aiming to provide significant relief to retirees.
This initiative comes on the heels of a record income tax cut for all earners implemented in the previous year, leading House and Senate finance leaders to approach the issue with caution. While both chambers agree on the need to eliminate the tax on Social Security benefits, they differ in their approaches to achieving this goal.
The House recently voted to phase out the tax over a three-year period, with the plan set to be retroactive to January of this year. Del. John Hardy, R-Berkeley, explained that the gradual phase-in was seen as a fiscally responsible approach by the House members.
Conversely, the Senate has tied the tax cuts on Social Security benefits to broader income tax cuts slated for the future. If state finances permit an additional 10% income tax cut for all earners, the tax cut on Social Security benefits would be delayed. However, if not, retirees could expect some relief starting in January of the following year.
Sen. Eric Tarr, R-Putnam, emphasized that whichever route is taken, seniors will ultimately see a tax reduction while ensuring the state’s financial stability. Despite the complexity of the plan, Tarr defended its practicality and responsibility.
Critics, however, point out that the plan introduces uncertainty for Social Security beneficiaries, with decisions on tax elimination or phase-outs potentially being delayed until August. This ambiguity has raised concerns about the clarity and effectiveness of the proposed tax changes.
The Senate was slated to vote on the matter on Thursday but has postponed the decision until at least Friday, reflecting the complexity and differing opinions surrounding the issue. Governor Justice also proposed additional measures such as a child care tax credit and property tax relief for seniors, although these ideas have not gained traction in either chamber.
As the 60-day regular session comes to a close on late Saturday, the future of the proposed tax cuts for Social Security benefits remains uncertain, with key decisions yet to be finalized.