Almost 500,000 Social Security recipients in West Virginia could see higher monthly payments as the state phases out its income tax on benefits.

West Virginia lawmakers are concluding the three-year plan to eliminate the tax on Social Security, allowing seniors to receive a higher payment in line with what 41 states already offer.

Why It Matters

Roughly 480,000 West Virginia residents rely on Social Security payments each month. 

While West Virginia has eliminated taxes on benefits over the past three years, it’s one of just a few states that tax Social Security payments. Only Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah and Vermont continued to tax Social Security in 2025.

What To Know

House Bill 4880, passed in 2024, eliminated the Social Security tax over three years. In 2024, beneficiaries in West Virginia saw a 35 percent tax cut. In 2025, it moved to 65 percent, and it’s finally at 100 percent in 2026.

Delegate Jonathan Pinson, a Mason Republican, said removing the tax for seniors could amount to an extra month of groceries.

“It’s another opportunity to pay bills and to get caught up on bills. It’s an opportunity to live the life that they’ve worked all these years to prepare form” Pinson said, as reported by local news station WCHS. He added that the extra money in seniors’ pockets will help the communities they live in, as they have more money to spend.

“For every one dollar that remains local, we see that it generates about a dollar and a half of local economic activity,” Pinson said. “By allowing seniors to keep more of their money, that’s allowing communities to grow.”

Because of the elimination of Social Security taxes, West Virginia will lose about $37 million from its budget.

“West Virginia is phasing out taxes on Social Security to keep retirees in the state and stay competitive with others that already exempt it,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “The argument is simple: 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

Delegate Jonathan Pinson said in a statement: “This isn’t a handout. It’s a give back. Seniors have already paid into the system and now West Virginia is finally saying you’ve earned it. You keep it, you spend it how you choose.”

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “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. The decision actually drew bipartisan support and speaks to the desire to boost the buying power of seniors who have been hit hard by the inflationary pressures of the last few years.”

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “Long term, the revenue doesn’t disappear; it shifts. 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 end to Social Security taxes could help push other states to end their tax practices on benefits as well.  

“The bigger question is if this elimination will remain only in West Virginia, as other states—and even past presidential campaigns—have been throwing around the idea of a push to drop income taxes entirely on benefits at the state and federal levels,” Beene said. “For states, the pluses of this decision are twofold, as it puts more money back in the hands of older consumers and could make their states a retirement destination for a growing population of America’s seniors in future years.”