Nearly half a million Social Security recipients in West Virginia are set to see higher monthly payments as the state completes its multi-year phaseout of income taxes on benefits.
State lawmakers are wrapping up a three-year plan that eliminates taxes on Social Security, bringing West Virginia in line with the majority of states that already exempt these payments and allowing seniors to keep more of their income.
Why It Matters
About 480,000 West Virginians depend on Social Security each month. Removing the state tax on these benefits increases take-home income for retirees, many of whom are living on fixed budgets amid rising costs.
Until recently, West Virginia was among a small group of states that taxed Social Security. As of 2025, only Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont continued the practice.
What to Know
House Bill 4880, passed in 2024, set the tax repeal in motion over three years. Beneficiaries received a 35 percent tax reduction in 2024, a 65 percent reduction in 2025, and full elimination in 2026.
Delegate Jonathan Pinson, a Republican from Mason County, said ending the tax could effectively cover an extra month of groceries for many seniors.
“It’s another opportunity to pay bills and get caught up,” Pinson said in comments reported by local station WCHS. He added that the additional income is likely to be spent locally, benefiting communities across the state.
“For every dollar that remains local, it generates about a dollar and a half in local economic activity,” Pinson said. “Letting seniors keep more of their money helps communities grow.”
Budget Impact and Economic Rationale
The elimination of the Social Security tax is expected to reduce state revenue by about $37 million. Supporters argue the loss will be offset by increased spending and economic activity.
“West Virginia is phasing out taxes on Social Security to keep retirees in the state and stay competitive with others that already exempt it,” said Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, in comments to Newsweek. “Beneficiaries already pay federal taxes, so taxing those benefits again at the state level feels like double taxation. For retirees, this means a higher net check and better monthly cash flow.”
What People Are Saying
Pinson emphasized that the move recognizes what seniors have already contributed. “This isn’t a handout. It’s a giveback. Seniors paid into the system, and now West Virginia is saying: you’ve earned it.”
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said the policy reflects bipartisan support and a desire to protect seniors’ purchasing power after years of inflation.
“The elimination of income tax on Social Security benefits in West Virginia represents the final phase of a three-year process to better financially assist recipients,” Beene told Newsweek. “It speaks to the urgency of helping seniors who’ve been hit hard by rising prices.”
Thompson added that, over time, the state could recoup revenue indirectly. “Money returned to beneficiaries usually gets spent, and spending gets taxed through sales taxes, fees, and online transactions. The bet West Virginia is making is that keeping retirees—and their spending—inside the state is better than watching both leave.”
What Happens Next
Beene said West Virginia’s move could encourage other states to reconsider their own taxes on Social Security benefits.
“The bigger question is whether this remains unique to West Virginia,” he said. “Other states—and even past presidential campaigns—have floated the idea of eliminating taxes on benefits at both the state and federal levels. The upside is clear: more money for older consumers and a stronger draw for retirees looking for affordable places to live.”
