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Tool | October 2015

State-by-State Guide to Taxes on Retirees

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West Virginia

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The Bottom Line
Map of West Virginia

Tax-Friendly

The Mountain State uses the federal income tax form as the starting point for its state income tax. So any amount of retirement income that is taxable and included in federal adjusted gross income is taxable in West Virginia. Ditto for Social Security benefits. The state does offer some retirement-income exemptions, however. Sales taxes are reasonable.

State Sales Tax

6% (nonprepared food and prescription drugs are exempt). Prepared food items, food sold through vending machines and soft drinks are taxed at 6%. Some municipalities may add a local sales tax of up to 1%.

Income Tax Range

Low: 3% (on up to $10,000 of taxable income)

High: 6.5% (on taxable income of $60,000 or more)

Social Security

Social Security benefits are taxed to the extent that benefits are taxed by the federal government.

Exemptions for Other Retirement Income

Taxpayers 65 and older may exclude the first $8,000 of any type of retirement income ($16,000 for married couples) from West Virginia taxes. Out-of-state pensions qualify for the $8,000/$16,000 exemption. Residents can exempt $2,000 of civil or state pensions.

A Family Tax Credit is also available to income-eligible families to reduce or eliminate their West Virginia personal income tax.

IRAs

Qualifies for the retirement-income exemption.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Qualifies for the retirement-income exemption.

Private Pensions

Qualifies for the retirement-income exemption.

Public Pensions

Qualifies for the retirement-income exemption. Residents can also exempt $2,000 of civil or state pensions.

Property Taxes

Median property tax on West Virginia's median home value of $103,200 is $605, according to the Tax Foundation.

Tax breaks for seniors: The homestead program allows a $20,000 exemption against the total assessed value of single-family homes, including manufactured homes. So if the home's assessed value is $80,000, the homestead exemption allows the home to be taxed on the discounted value of $60,000. This is a benefit administered at the county level for those who are 65 or older or totally and permanently disabled.

If you still owe local property taxes on your home after the application of the homestead exemption and your federal adjusted gross income is no higher than 150% of the federal poverty guideline, you may qualify for the Senior Citizens Tax Credit. The tax credit for eligible homestead exemption participants is based on the tax paid on the first $20,000 of taxable value. The federal poverty guideline is based on the number of people living in the home. So for the home assessed at $80,000, the homestead exemption and income tax credit allow the home to be taxed on the discounted value of just $40,000.

If your property taxes are more than 4% of your annual gross income, you could qualify for the Homestead Excess Property Tax Credit, which is equal to the amount of property tax that exceeds 4%. (Qualifying income includes federal adjusted gross income, nontaxable benefits and any other nontaxable sources of income.) The credit cannot exceed $1,000. Gross household income must be 300% or less of the federal poverty guideline. If you also qualify for the Senior Citizens Tax Credit, you must deduct that credit amount from property taxes paid when determining eligibility. If that net amount exceeds 4% of income, you may qualify for the Homestead Excess Property Tax Credit.

Inheritance and
Estate Taxes

There is no inheritance tax or estate tax.

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