House Finance moves to eliminate Social Security tax on income.

TLDR:

• The House Finance Committee advanced a bill to phase out income tax on Social Security over three years.
• The estimated financial effect of fully eliminating income taxes on Social Security benefits would be a little more than $37 million.

The House Finance Committee advanced a bill proposed by Gov. Jim Justice to phase out income tax on Social Security over a three-year period. The committee leaders cited the desire to provide a tax break for seniors while also being cautious about the state’s budget. They noted that the state is still monitoring the effects of other recent tax cuts before fully implementing this one. The estimated financial effect of fully eliminating income taxes on Social Security benefits would be slightly over $37 million. The bill, introduced as HB 4880, aims to exempt those in higher tax brackets from being taxed on their Social Security benefits, affecting approximately 50,000 senior households. Some delegates expressed support for the bill but suggested that the full exemption could be implemented immediately. This proposal is part of Gov. Justice’s plan to introduce three tax breaks, including a state child and dependent care tax credit and an expansion of the senior citizen homestead property tax cut, which combined add up to about $50 million.