West Virginia Lawmakers Pass Bill to Phase Out State Taxes on Social Security Payments
Lawmakers in West Virginia have made a significant move towards relieving the financial burden on retirees by passing a bill to phase out state taxes on Social Security payments. The bill, which was overwhelmingly approved by the GOP-led House of Delegates, will eliminate the tax for Social Security recipients over a three-year period. The tax will be reduced by 35 percent per year, resulting in a complete elimination of the tax by 2026.
The measure, which passed with a vote of 96-0 in the House, aims to alleviate the tax burden on retirees who rely on Social Security benefits as their primary source of income. Currently, West Virginia is one of the few states that taxes Social Security payments, causing financial strain for many retirees. Republican state Delegate Larry Kump expressed his support for the bill, stating that it is time to address the issue that has been plaguing retirees for years.
Although the tax cut is a welcome relief for retirees, it is important to note that it only applies to state taxes. Federal taxes on Social Security payments would require separate legislation at the congressional level. Nevertheless, the passing of this bill is a significant step in the right direction towards providing financial security for retirees.
The tax cut is estimated to cost around $37 million in both 2025 and 2026 and will impact over 50,000 households in West Virginia. While this may seem like a substantial expense, proponents argue that it is a necessary investment in the well-being of seniors who have contributed to society throughout their lives.
However, caution has been urged by some organizations. The West Virginia Center on Budget and Policy has expressed concerns that continued efforts to eliminate personal income tax could undermine the state’s ability to meet the needs of seniors, children, and families. Executive Director Kelly Allen emphasized the importance of balancing tax cuts with ensuring adequate support for vulnerable populations.
Republican Governor Jim Justice, who has made the elimination of the tax on Social Security payments a priority, has not yet indicated whether he will approve the proposed bill. His own version of the bill aimed to eliminate the personal income tax on Social Security payments retroactively from January 1 of this year.
Despite differing opinions on the matter, the proposed tax cut has gained support from senior advocacy groups such as AARP (formerly known as the American Association of Retired Persons). A spokesperson for AARP emphasized that taxing Social Security undermines the purpose of the program, which is to lift seniors out of poverty. This step towards eliminating the tax is seen as a positive move in the right direction.
It is worth noting that Social Security recipients in West Virginia and other states may experience smaller increases in their benefits in 2025 due to lower-than-expected inflation. According to the Senior Citizens League, the forecast for the cost-of-living adjustment (COLA) in 2025 is estimated to be 1.75 percent, reflecting the January consumer price index for urban wage earners.
While the passing of this bill in West Virginia is an encouraging development for retirees, it is important to continue monitoring the impact of tax cuts on the state’s ability to provide essential services. The well-being of seniors, children, and families should remain a top priority while striving for a fair and equitable tax system.
