West Virginia House Finance Committee Advances Bill to Phase Out Tax on Social Security
In a move to provide tax relief for seniors while also being cautious about the state's budget, the House Finance Committee in West Virginia has advanced a bill to phase out the personal income tax on Social Security. This proposal, put forward by Governor Jim Justice, aims to eliminate the tax over a period of three years.
House Finance Chair Vernon Criss, R-Wood, explained that the committee's decision to phase tax cuts in is both customary and prudent. The state is already monitoring the impact of recent cuts, such as a significant personal income tax cut and rebates for personal property taxes on vehicles. Additionally, there is the possibility of another personal income tax cut due to an economic trigger.
While some lawmakers believe the full exemption of Social Security income from taxation could be implemented immediately, the proposed bill would provide tax relief for seniors in higher tax brackets who are currently subject to the tax. The estimated financial effect of eliminating income taxes on Social Security benefits would amount to over $37 million.
Governor Justice's State of the State speech included three tax breaks, including the exemption of Social Security income. The combined cost of these tax breaks is estimated to be around $50 million.
The bill under consideration, named HB 4880, builds on a 2019 law signed by the governor, which already exempts Social Security income from personal income taxes for most West Virginians, particularly those in lower tax brackets. If passed, the new proposal would extend this exemption to those in higher brackets.
The Justice administration predicts that approximately 50,000 senior households would benefit from this legislation. Delegate Clay Riley, R-Harrison, expressed support for the bill, highlighting the measured approach and the importance of supporting seniors.
The bill will now proceed to the House of Delegates for further consideration.
Analyst comment
Positive news: Gov. Jim Justice’s bill to phase out the personal income tax on Social Security is advancing. It aims to provide a tax break for seniors while being cautious about the state’s budget. The estimated financial effect is $37 million. This could benefit 50,000 senior households. As an analyst, I predict that this move will likely have a positive impact on the market, especially for seniors and retirement-focused industries.
