Lower WV State Taxes on Social Security/SSI Benefits

By Deb Miller - West Virginia Senior Legal Aid Contributor

Lower taxes - something to celebrate!           

Thanks to a 2019 tax law change, a group of West Virginians already pay no income taxes on the Social Security Old Age, Survivors and Disability benefits or Supplemental Security Income for the Aged, Blind and Disabled (SSI) benefits they receive. 

West Virginia recipients of Social Security/SSI with federal adjusted gross incomes of $50,000 or less ($100,000 or less for a married couple) currently avoid those state income taxes altogether.   

The 2024 legislative session passed a tax reduction law that applies to all other West Virginians receiving Social Security/SSI, regardless of income. 

While federal taxation of these benefits is not affected, a phase-in of the lower state income tax rates is involved.

In 2024, those whose federal adjusted gross income (which is used on the West Virginia income tax return) is higher than $50,000 for an individual or $100,000 for a married couple will be taxed 35% less on their Social Security/SSI benefits on their state tax return. 

In 2025, 65% of the benefits won’t be taxed on their state tax return. 

In 2026, the full amount of the Social Security/SSI income will be tax-free on their West Virginia tax return.

For example, Samuel’s federal adjusted gross income in 2024 is projected to be $75,000. It will be transferred to his state return for calculation purposes. Of that amount, $35,000 is from Social Security benefits. 

Samuel is single and his adjusted gross income for West Virginia tax purposes is over the $50,000 maximum income threshold for an individual. As a result, he will get a 35% reduction in state taxes on his Social Security income in 2024.

In 2025, 65% of his Social Security will not be taxed on the state return. 

Finally, in 2026, all of Samuel’s Social Security will be tax-free on his West Virginia tax return.   

This tax reduction does not apply to federal taxation of the benefits, retirement fund distributions outside of the Social Security/SSI system, or taxation of other types of income. 

Legal issues about taxation and other matters are important ones to resolve. In appropriate situations, West Virginia Senior Legal Aid may be able to help those age 60 and older who live in the state.