CHARLESTON, W.Va. — West Virginia citizens will soon reap the benefits of two additional cuts to the state income tax.
As of this morning, a 4% tax cut has been automatically hit due to the state hitting an economic trigger.
West Virginia Revenue Secretary Larry Pack says the triggers were put in to reward the state for its economic growth.
“The triggers were created, in that, if West Virginia’s revenue (the state government’s revenue) grows faster than inflation, then the taxpayers will receive a tax cut,” Pack said. “It only happens if our revenues grow faster than inflation, and we were very fortunate enough in calendar year 2023 that we did that.”
On top of the 4% triggered at the start of the year, citizens will also see an additional 2% tax cut that was passed in the last special session. The 4% and additional 2% cuts are on top of the 21.25% tax cut approved by lawmakers in 2023.
With the assortment of tax cuts passed in recent months, Pack doesn’t see the state hitting another trigger soon…but it isn’t impossible.
“We don’t anticipate a trigger for this fiscal year, but it is a possibility that it could happen,” Pack said.
Gov. Jim Justice also signed a bill that would also see a “phasing out” of state taxes on Social Security benefits. This approved a 35% cut retroactive to January 1, 2024. Today, for the second year of the phase out, the cut has been bumped up to 65% before it goes to 100% in 2026.
Pack says this cut needed to be done in a three-year window, but he’s very excited to lift the burden off state retirees.
“By the time we get to the end of 2026, you’re Social Security tax will be completely tax free in West Virginia,” Pack said. “Governor Justice and the Legislature thought it was prudent to do this over a three-year period, so we’re excited to get to year numbers two, and very soon, West Virginians will not have to pay any income tax on their Social Security benefits.”
Pack also addressed another tax cut that state legislature passed in 2023 which gives state residents the full vehicle tax credit if paid in time. Residents that paid their entire full vehicle property tax by October 1, 2024, will receive the entire amount back by way of a credit when filing their 2024 state income tax in the spring.
Pack says this will be another victory for taxpayers.
“We’re very excited to be able to give taxpayers relief on the car tax. It’s an average I think, for West Virginians, around $500, but it all depends upon the type of car and the number of cars that you drive,” Pack said. “It’s a refundable credit, so even if you don’t owe income taxes, you’ll be able to get that money back.”
Pack also says the tax department has been preparing for the changes to be implemented.
“The tax department has been working really hard to ramp up and be ready for this,” Pack said. “We look forward to being able to reduce the burden somewhat for West Virginians,” Pack said.
Pack closed by saying that the Justice administration is happy with the state’s progress during their time, but they’re also excited for how it can be built upon.
“The Justice administration feels very confident about hitting our budget numbers for this fiscal year, and we have a lot of confidence in the Morrisey administration to, as Governor Justice would say, to ‘mind the storm’ going forward,” Pack said.