House passes bill to eliminate Social Security tax 

The West Virginia House of Delegates on Thursday unanimously passed legislation that would eliminate the state’s tax on Social Security benefits.

House Bill 4880 would implement the tax cut over three years, starting with a 35% deduction for 2024, 65% for 2025 and 100% for 2026. 

Eliminating the state tax on Social Security is one of three tax cuts Gov. Jim Justice has proposed in his $5.26 billion fiscal year 2025 budget. Eliminating the tax would mean about $37 million loss in revenue and the three tax cuts together equal about $50 million.

Speaking in support of the bill Thursday, Del. Larry Kump, R-Berkeley, said that taxation on Social Security or any pension or retirement “grinds his gears” and gives him “legislative heartburn.”

“We’ve been fooling around with this taxation issue on Social Security benefits for many years now,” Kump said. “And I’m grateful that we’re going to be doing more on it. I wish we were doing it more quickly and taking care of the issue completely since all our surrounding states do not tax Social Security benefits. I’m further concerned about our poor retired public employees and the cost of living on their pension but that’s another issue. Let’s go ahead and pass this bill. It’s certainly better than a poke in the eye with a sharp stick. Let’s keep the light on for these people.”

A spokesman for AARP West Virginia, an organization that supports the interests of older West Virginians, has called the bill “a step in the right direction.”

“Taxing Social Security undermines the purpose of Social Security,” AARP West Virginia spokesman Tom Hunter previously told West Virginia Watch. “This was a program that was designed to lift seniors out of poverty. It wasn’t a program that was designed to fund state governments. So we believe this is a step in the right direction.”

Social Security is a federal program that workers pay into to receive benefits when they’re older or disabled. According to AARP, more than 400,000 West Virginians depend on Social Security benefits. 

In a statement Thursday, Kelly Allen, executive director of the West Virginia Center on Budget and Policy, said that efforts to erode personal income tax are undermining the state’s ability to meet the needs of seniors, children and families and called for the state to roll back automatic triggers in the 2023 tax law that would further reduce revenues.

“If lawmakers are insistent on eliminating the tax on Social Security for higher income seniors, they must prioritize broader fiscal responsibility by rolling back the automatic triggers from 2023’s tax law that will further reduce revenues that pay for vital services that all West Virginians rely on,” Allen said. “Otherwise, they will set the state up for a future fiscal crisis where they must roll back tax cuts or make painful budget choices.” 

Currently, the state allows a tax deduction for all Social Security benefits for single people with less than $50K in federal adjusted gross income or married people less than $100K in federal adjusted gross income. 

The bill will next go to the Senate for consideration.