West Virginia retirees with higher incomes will owe no state income tax on their taxable Social Security benefits for the first time on the 2026 return, which is filed in the spring of 2027. The state’s tax division lists the exemption for taxpayers above the income threshold at 35% for tax year 2024, 65% for tax year 2025 and 100% for tax year 2026. The return many of those retirees filed this past spring, covering 2025, was still only 65% exempt.
The threshold is federal adjusted gross income of more than $50,000, or more than $100,000 for a joint filer. Retirees at or below those amounts have had a full exemption since tax year 2022, so the 2026 return is the first one on which every income level is treated the same. The change comes from HB 4880, which the Legislature passed in its 2024 regular session.
The people with something to do are West Virginia retirees whose federal adjusted gross income, the bottom-line figure on a federal Form 1040 before deductions, runs above $50,000 single or $100,000 joint. For them, the spring 2027 return should treat all taxable Social Security benefits as exempt from state tax, not the 65% share that applied to the 2025 return. Anyone at or below the line should see no change, because the state has exempted their benefits in full since 2022.
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How the exemption climbed from 35% to 100% above the line
Before HB 4880, the full exemption reached only taxpayers under the income limits. The 2024 law added what the tax division calls a decreasing modification for everyone above them, and wrote the percentages into a three-year schedule: 35% for tax year 2024, 65% for 2025 and 100% for 2026.
The division describes the approach as a “gradual phasing in of the modification of their Social Security income.” A modification, in state tax terms, is an amount subtracted from federal adjusted gross income when the state return is figured. At 65%, a retiree above the threshold still added the other 35% of taxable benefits back into West Virginia income. At 100%, nothing is added back.
Who was already fully exempt before 2026?
Single filers with federal adjusted gross income of $50,000 or less, and joint filers at $100,000 or less, saw 100% of their taxable Social Security benefits exempted starting with tax year 2022. The state’s page puts it this way: “100% of taxable social security benefits became exempt from West Virginia income tax.”
That is the group for whom the headline change is old news. Their returns for 2022 through 2025 already left the benefits out, and the 2026 return keeps them out. The only difference in 2026 is that the retirees above the line catch up to them.
Where the $8,000 senior modification fits in
West Virginia has a separate $8,000 modification for taxpayers who are 65 or older, or certified as permanently disabled. The tax division says a filer receives the higher of that $8,000 or the total of several decreasing modifications, which include taxable Social Security benefits and certain public pension modifications.
The division also notes that during the phase-in, many taxpayers’ Social Security benefits may be less than $8,000, so the benefit of the Social Security modification may not show up until 2026. In practice, a retiree with modest taxable benefits may see the larger gain only once the percentage reaches 100%. The Social Security rule is in W. Va. Code §11-21-12(c)(8) and the $8,000 rule in §11-21-12(c)(9), as the division cites them.
What the exemption does not settle
The modification applies to West Virginia income tax. The division’s page does not name specific schedules or forms for claiming it, so retirees filing in 2027 will be working from the current West Virginia return instructions and their tax software. Questions go to the division’s Taxpayer Services at 304-558-3333 or toll-free 1-800-982-8297, from 8:00 a.m. to 5:00 p.m., or by email at TaxHelp@WV.Gov.
The year-by-year schedule is the part that matters for timing. A retiree above the threshold who filed in spring 2025 for tax year 2024 had 35% of taxable benefits exempted. The spring 2026 filing for tax year 2025 raised that to 65%. The filing due in spring 2027 for tax year 2026 is the first at 100%, and the state’s page lists no step beyond it.
Two limits are worth keeping straight. The exemption is a West Virginia income tax rule, so it says nothing about how Social Security benefits are treated on a federal return. And because the state’s page carries no last-updated date, retirees who want certainty before filing can confirm the percentages with Taxpayer Services or in the 2026 return instructions once the state publishes them.
Will West Virginia’s 100% exemption show up on the 2026 return?
A retiree who carried over last year’s 65% treatment, or whose software did, could report part of the benefits as taxable state income and overpay. States also differ widely, and a move across a state line can change what is taxed.
Cut Your Retirement Tax Bill: 12 Moves is a 14-page guide that shows how much of a retiree’s Social Security is taxed, worked out on one worksheet, and lays out each state’s rules, including the eight states that tax some Social Security. It also puts the 2026 numbers on a single page for quick checking at filing time.
Work out what share of Social Security is taxed with the Cut Your Retirement Tax Bill guide →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
