West Virginia Governor Proposes Eliminating Social Security Tax: Last week, during his State of the State address, Governor Justice introduced a tax reduction package that aims to increase the disposable income of individuals across all age groups in West Virginia. Significant reforms are incorporated into the state’s Social Security income tax, child and dependent care credit, and senior citizen property tax credit as part of the plan.
The purpose of these tax cuts is to prioritize West Virginians, according to Governor Justice. “Our ongoing efforts to reduce the cost of living, raising a family, and retiring in West Virginia are reflected in these proposals, which exemplify my dedication to restoring tangible funds to individuals’ wallets, assisting families in caring for their children, ensuring that seniors remain in their residences, and improving the quality of life for all.” I urge the Legislature to give these proposals serious consideration.”
Higher Wage Earners to Pay More in Social Security Taxes Starting in 2024
Highlights of the Governor’s Proposed Tax Cuts:
Social Security Benefit Exemption:
- Who benefits: over 50,000 senior households.
- What changes:
- Removes the current income cap on excluding Social Security income from taxation.
- If passed, it will be effective retroactively to January 1, 2024.
- Benefits:
- Reduces the tax burden for many low- and middle-income seniors.
- Brings West Virginia in line with 40 other states that don’t tax Social Security.
- Supported by AARP-WV.
Child and Dependent Care Tax Credit:
- Who benefits: Over 16,000 West Virginia families.
- What changes:
- Creates a state tax credit equal to 50% of the allowable federal child and dependent care credit.
- Effective retroactively to January 1, 2024.
- Benefits:
- Makes childcare more affordable for families.
- Aligns with existing federal credit for easier understanding and compliance.
- Additional details:
- Maximum childcare credit ranges from $300 to $525 for one child and from $600 to $1,050 for two or more children, depending on the amount of out-of-pocket expenses incurred and income level.
Senior Citizen Property Tax Credit:
- Who benefits: seniors with homestead property taxes and federal adjusted gross income below 200% of the federal poverty guideline.
- What changes:
- Increases the maximum credit amount by 50%.
- Expand eligibility by an additional 50% of the federal poverty guideline.
- Effective retroactively to January 1, 2024.
- Benefits:
- Reduces the property tax burden for eligible seniors.
- Reaches more low- and middle-income seniors within the eligibility range.
The governor’s proposed tax cuts are now being considered by the West Virginia Legislature.
COLA 2024: How Will Social Security Benefits Affect Your Income Tax?
