West Virginia for retirees: Social Security off in full, pensions taxed, and the $8,000 with a catch

The headline for 2026: Social Security is no longer taxed in West Virginia, for anyone, at any income. The federally taxable part comes off in full on Schedule M. That is the end of a three-year phase-in, and it removes the $50,000 single and $100,000 joint cliff that decided the question until now. The rest of a retiree’s income is a different story. A private pension, a traditional IRA withdrawal, a 401(k) distribution and a Roth conversion are all taxed as ordinary income at 2.11% to 4.58%, with no exclusion and no age-based rate. What West Virginia offers instead is a short list of fully exempt pensions, military, State Police, municipal police and fire, federal law enforcement and Railroad Retirement, a $2,000 subtraction for state and federal civil service pensions, and an $8,000 modification at 65 that is reduced dollar for dollar by the Social Security subtraction you just took.

That last rule is the one to understand before anything else. The $8,000 is not an exemption for the first $8,000 of retirement income. It is the greater of $8,000 or the subtractions already taken on lines 29 through 34 of Schedule M, which include Social Security and every exempt pension. A 66-year-old with $12,000 of taxable Social Security gets the $12,000 off and nothing off the IRA. Most retirees with a normal Social Security benefit will see the $8,000 line read zero.

Social Security: 100% from 2026

Line 34 of Schedule M subtracts the taxable portion of Social Security, the figure from line 6b of the Form 1040. For 2022 and later years, filers with federal AGI of $50,000 or less ($100,000 joint) subtracted all of it. H.B. 4880 (2024) phased the subtraction in for filers above those lines: 35% for 2024, 65% for 2025, and 100% for tax year 2026. From this return on, the income test is gone and the arithmetic is one line. Only the federally taxable part is subtracted because only that part was in AGI; if the federal formula taxed none of your benefit, there is nothing to subtract and nothing to tax.

Software that carried last year’s 65% into 2026 will overstate the tax. Check line 34 against line 6b of the 1040.

Pensions, IRAs and 401(k)s

A pension earned in another state and paid to a West Virginia resident is West Virginia income; federal law since 1996 bars the former state from taxing it. The Tax Division is redesigning the IT-140 for 2026, so line numbers may shift.

The fully exempt list is specific. Military retirement, including a survivor benefit plan annuity, comes off without limit. So do the pensions of the West Virginia State Police, municipal police and firefighters, deputy sheriffs, and federal law enforcement officers under the federal systems named in the instructions. Everything else that calls itself a pension is taxed, and a state or federal civil service pension gets $2,000, not more, however large it is. A retired teacher with a $30,000 Teachers Retirement pension subtracts $2,000 and pays tax on $28,000.

The $8,000 modification, line by line

Line 47 of Schedule M is for a taxpayer 65 or older on the last day of the year, or certified permanently and totally disabled. Each spouse qualifies separately, and each spouse’s $8,000 is figured against that spouse’s own subtractions. The instruction is to take $8,000, subtract the total of lines 29 through 34 for that person, and enter the result, not below zero. Lines 29 through 34 are U.S. and West Virginia bond interest, the exempt police, fire, law enforcement and military pensions, the $2,000 public pension subtraction, and Social Security.

Three retirees, all 67:

• A single retiree with $18,000 of Social Security and a $22,000 IRA withdrawal. Under the federal formula about $3,000 of the benefit is taxable. Line 34 takes off $3,000; line 47 is $8,000 less $3,000, or $5,000, which comes off the IRA. West Virginia taxes $17,000 of the IRA, less the $2,000 exemption.
• A married retiree with $23,800 of taxable Social Security and a $24,000 private pension. Line 34 takes off $23,800. Line 47 is $8,000 less $23,800: zero. The whole pension is taxed.
• A retired Army officer with a $40,000 military pension, $20,000 of taxable Social Security and a $10,000 IRA withdrawal. Lines 32 and 34 take off $60,000. Line 47 is zero. The IRA is taxed in full, and the retiree has still done well.

The practical reading: the $8,000 helps the retiree 65 or older whose Social Security is small or largely untaxed federally and whose income is pension or IRA money. For a retiree with a full Social Security benefit, it is the Social Security subtraction that does the work, and the $8,000 is already spent.

Roth conversions are real state money here

A Roth conversion is an IRA distribution that is immediately deposited in a Roth. It lands on line 4b of the 1040, inside federal AGI, and West Virginia gives no subtraction for it. The converted amount is taxed through the brackets with everything else, and because the brackets are the same for joint and single filers and top out at $60,000, a $50,000 conversion by a couple already at $40,000 of taxable income is taxed mostly at 4.22% and 4.58%. On top of the state tax, the conversion raises federal AGI, which can make more Social Security taxable federally (though no longer in West Virginia), raise Medicare premiums two years later through IRMAA, and push a retiree past the income limits for the Senior Citizen Tax Credit and the Homestead Excess Property Tax Credit described below.

The planning point is timing. A conversion done in a year with low other income, before Social Security or a pension starts, uses the 2.11% and 2.81% brackets. The same conversion at 72, with Social Security and a required minimum distribution already on the return, is taxed at 4.58%. Spreading a conversion over several years keeps each year’s slice in the lower brackets. The qualified Roth withdrawals that follow are never in AGI and never taxed by West Virginia.

The federal senior deduction does not reach West Virginia

The $6,000 federal deduction for people 65 and older, in effect for 2025 through 2028, comes off after adjusted gross income, alongside the standard deduction. The IT-140 starts from AGI, so the deduction never arrives and no add-back is needed. The same is true of the extra federal standard deduction for age. What West Virginia gives at 65 is its own pair: the $8,000 modification on line 47, with the reduction described above, and the property tax relief below. There is no age addition to the $2,000 exemption.

Surviving spouses

Two things change on the return after a spouse dies. For the two years after the year of death, a surviving spouse who has not remarried claims an additional $2,000 exemption (box d). And line 48 of Schedule M allows a surviving spouse modification of up to $8,000 if the deceased spouse was 65 or older at death or certified permanently and totally disabled; the booklet carries the full conditions. Military survivor annuities stay fully exempt on line 32.

Relief on the property tax bill

West Virginia’s help for older homeowners is on the county property tax bill and, unusually, on the income tax return as refundable credits.

There is no senior assessment freeze and no renter credit. The SCTC and HEPTC can be taken together; the DV-1 is taken alone.

The Senior Citizen Tax Credit is the piece most often missed, because the people who qualify usually do not have to file. A retiree living on Social Security alone, in the Homestead Exemption program, with no other income, can claim it on MyTaxes under “Claim the Motor Vehicle and/or Senior Citizen Property Tax Credit(s)” or by mailing Form SCTC-A, no IT-140 required. The income test is federal AGI, which for 2026 still counts the taxable part of Social Security even though West Virginia no longer taxes it.

Withholding and estimated payments

Social Security has no West Virginia withholding and needs none. Pension payers and IRA custodians will withhold West Virginia tax if asked; many default to none. A retiree whose only taxable income is a pension or IRA withdrawals, with no state withholding, will owe the full amount in April and, if the bill is $600 or more, owes estimated payments on Form IT-140ES or through MyTaxes by 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. The simplest fix is to have the pension payer withhold a flat amount; the IRA custodian can do the same on a required minimum distribution.