How West Virginia income tax works: federal AGI, a $2,000 exemption, five brackets to 4.58%

West Virginia taxes federal adjusted gross income, not federal taxable income. Form IT-140 copies line 11 of the Form 1040, adds a short list of items, subtracts a longer one on Schedule M, takes off $2,000 for every person on the return, and runs what is left through five brackets. For 2026 the rates are 2.11% on the first $10,000, 2.81% to $25,000, 3.16% to $40,000, 4.22% to $60,000 and 4.58% above that, every one of them 5% lower than last year under S.B. 392. There is no standard deduction, no itemizing, no local income tax, and no separate rate for capital gains. The brackets are the same whether you file single or jointly.

That design decides most of what follows. Anything the federal return does after adjusted gross income, the standard deduction, itemized deductions, the $6,000 senior deduction, the new deductions for tips, overtime and car-loan interest, never reaches West Virginia. Anything done above the line, an IRA or HSA contribution, half of self-employment tax, student loan interest, flows straight through and cuts West Virginia tax too. S.B. 400 moved the state’s conformity date to the Internal Revenue Code as of December 31, 2025, so the 2025 federal law applies here exactly as far as it changes AGI and no further.

Who files

A full-year resident reports all income from everywhere. A part-year resident reports everything earned while living here plus West Virginia-source income from the rest of the year, and a nonresident reports West Virginia-source income only; both attach Schedule A, which prorates the tax. Residents of Kentucky, Maryland, Ohio, Pennsylvania and Virginia whose only West Virginia income is wages owe nothing here and give the employer Form WV/IT-104NR to stop the withholding. The West Virginia Tax Division says you must file if you were a resident or part-year resident, or a nonresident with West Virginia-source income, and it is worth filing below any threshold to recover withholding or to claim the refundable property tax credits. Married couples with different periods of residency must file separate state returns. Residency and the move year are covered in Moving to West Virginia.

Where it starts: federal AGI

Line 1 of the IT-140 is federal adjusted gross income. Lines 2 and 3 bring over the additions and subtractions from Schedule M, line 4 is West Virginia adjusted gross income, and line 5 is the low-income earned income exclusion, which the 2025 booklet works out on a page-29 worksheet for filers with federal AGI of about $10,000 or less (verify). Line 6 is the exemptions, and line 7 is West Virginia taxable income. Six lines, and the arithmetic is done.

The federal standard deduction of $32,200 joint for 2026 plays no part. Neither does the $40,400 SALT cap: West Virginia has no itemized deductions to cap. Mortgage interest, charitable gifts, medical bills and property taxes earn nothing on the IT-140, whatever you did federally. The one exception is gambling losses, which Schedule M allows up to West Virginia gambling winnings, and only if you itemized on the federal return.

The additions

Schedule M lines 51 through 59 add back a few things that were exempt federally but are taxed here. For most households the list is empty. The ones that come up: interest on other states’ municipal bonds (line 52), which West Virginia taxes while exempting its own, and a SMART529 withdrawal not used for education (line 56), which takes back the subtraction you got when the money went in. A brokerage 1099 that lumps all municipal interest together has to be split by state.

The subtractions

Schedule M lines 29 through 48 are where West Virginia gives money back, and for 2026 the biggest line changed.

The Tax Division is redesigning the IT-140 for 2026, and line numbers may move. The substance of each subtraction is in statute and does not.

Social Security, line 34. For tax year 2026 the federally taxable part of Social Security comes off in full for every filer. The phase-in under H.B. 4880 ran 35% in 2024 and 65% in 2025 for filers above $50,000 single or $100,000 joint; filers below those lines were already fully exempt. The cliff is gone. What goes on line 34 is the taxable amount from line 6b of the 1040, not the gross benefit, because only the taxable amount was ever in AGI.

The $8,000 senior modification, line 47. A taxpayer 65 or older, or certified permanently and totally disabled, may subtract up to $8,000 of income from any source, each spouse separately. But the $8,000 is reduced by that person’s subtractions on lines 29 through 34, which include Social Security and the public pension lines. The Tax Division’s own description is that you get the higher of the $8,000 or the itemized subtractions, not both. A retiree with $12,000 of taxable Social Security gets the Social Security off and nothing off the IRA. The details are in West Virginia for retirees.

SMART529. Contributions to the state’s own 529 plan are subtracted in full; the booklet sets no dollar cap. The federal return never asks about 529 deposits, so this is the subtraction most often missed. Out-of-state plans do not qualify.

The exemption

West Virginia has no standard deduction. Line 6 is $2,000 for you, $2,000 for a spouse on a joint return, and $2,000 for each dependent, the same people you claimed federally. Someone who can be claimed on another return, a working teenager or a college student, claims zero exemptions and enters $500 instead. A surviving spouse gets one extra $2,000 exemption in each of the two years after the spouse’s death, if not remarried by year-end. The $2,000 is fixed in statute and is not indexed; it will be $2,000 again in 2027. There is no age addition and no phase-out at high income.

The rates

West Virginia taxable income runs through five brackets. The 2026 schedule below reflects S.B. 392, signed March 31, 2026, which cut every rate 5% retroactive to January 1. The brackets themselves did not move and are not indexed for inflation.

Married filing separately uses brackets exactly half as wide: $5,000, $12,500, $20,000 and $30,000, with the same rates. The 2025 rates on the same brackets were 2.22%, 2.96%, 3.33%, 4.44% and 4.82%.

Two things about this table surprise people. First, a joint return gets no wider brackets than a single one. Two spouses who each have $41,000 of taxable income would owe $1,148.70 apiece as singles, $2,297.40 together; on a joint return their $82,000 owes $2,958.10. The joint return costs $661 more. Only a married couple filing separately gets different brackets, and those are half-width, so a separated couple loses nothing by filing separately. Second, there is no capital gains rate. Gains, dividends, interest, unemployment and wages are all taxed through the same five brackets, and gains arrive on line 1 already netted inside federal AGI.

The 2027 rates are to come. S.B. 392 also rewrote the revenue trigger in W. Va. Code 11-21-4h: starting August 15, 2026, the Secretary of Revenue and the State Auditor compare general revenue to an inflation-adjusted base each year, and any excess becomes a further across-the-board cut of up to 10%. Whether the August 2026 check produced a cut, and which year it would first apply to, could not be confirmed when this was written (verify). Watch What’s new in West Virginia for 2026.

Local income taxes

None. No West Virginia city, county or school district levies an income tax, so the IT-140 is the only income tax return a resident files. Charleston, Huntington, Parkersburg, Weirton and a few other cities charge a flat weekly city service fee on people who work inside the city limits, a few dollars a week withheld by the employer and shown on the pay stub (verify). It is not an income tax, it is not deductible on the IT-140, and no credit is given for it.

The credits

Credits come in two kinds. Nonrefundable credits on the Tax Credit Recap Schedule reduce the tax on line 8 but stop at zero. The property tax credits on line 21 are refundable: they are paid out even to someone who owes nothing.

There is no state earned income credit, no state child tax credit, no renter credit, no charitable credit and no energy credit.

The vehicle credit is the one nearly everyone qualifies for and the one most often lost. The county bills personal property tax on every vehicle; the state refunds it in full on the income tax return, but only the amount paid on time (the first half before October 1, the second before April 1) and only the figure printed on the MV-1 letter the Tax Division mails. E-filers enter the claim number; paper filers attach the letter. If it has not arrived by mid-February, request another on MyTaxes, where people who do not need to file a return claim it directly. Families and the child care credit are in Credits and breaks for West Virginia families.

Withholding and estimated payments

Employers withhold from Form WV/IT-104, where the employee claims one exemption for each person who will be on the return and can add a flat extra amount per paycheck. The Tax Division revised the 2026 withholding tables for the rate cut. Because the brackets are not doubled for joint filers, a two-earner couple with each spouse withheld as if single is often under-withheld; the fix is the extra-amount line on one spouse’s IT-104.

Estimated payments on Form IT-140ES, or through MyTaxes, are required when West Virginia tax after withholding is expected to be $600 or more, due April 15, June 15, September 15 and January 15. The safe harbor is 90% of this year’s tax or 100% of last year’s, after credits. Filing the return and paying in full by February 1 avoids the fourth-quarter penalty. Farmers with two-thirds of gross income from farming make one payment by January 15 at 66⅔%, or simply file and pay by March 1. The people caught are the self-employed, landlords, anyone with a large gain, and retirees drawing on IRAs with no state withholding.

How to file

Most returns are e-filed with the federal return. The return is due April 15, 2027. A federal extension on Form 4868 automatically extends the West Virginia return to October 15, 2027; attach a copy and write the extended date in the box at the top of the IT-140. For a West Virginia-only extension, file Form WV4868. The extension is to file, not to pay; tax unpaid after April 15 draws interest and a late-payment penalty. Paper filers must enclose original W-2s, 1099s and K-1s or the withholding credit is disallowed; e-filers do not send them. MyTaxes takes payments and shows refund status. An amended return is the same IT-140 with the amended box checked. Dates and forms are in West Virginia calendar and forms.

What trips people up

• The federal tips, overtime or senior deduction expected to lower West Virginia tax. None of them reach line 1.
• Social Security still partly in income because software applied last year’s 65%.
• The $8,000 senior modification taken on top of a Social Security subtraction that already exceeds $8,000.
• The MV-1 letter thrown away, or the car tax paid late.
• A paper return mailed without the original W-2s.
• Withholding set as single on both spouses’ W-2s, then a balance due on the joint return because the brackets do not double.
• A SMART529 contribution nobody mentioned, because the federal return did not ask.
• The extension treated as an extension to pay.