West Virginia does have a state income tax

West Virginia taxes income earned by residents and nonresidents who work in the state. The tax applies to wages, self-employment income, interest, dividends, and other sources. Unlike some states, West Virginia does not have a flat tax rate — the rate increases as your income increases, ranging from 3% on the lowest bracket to 6.5% on the highest.

The state also taxes certain retirement income, though some types of pensions and Social Security receive partial or full exemptions. If you work in West Virginia but live in another state, you may owe tax to both states, though you can usually claim a credit on one return to avoid paying twice on the same income.

Key Takeaways

  • West Virginia's income tax rates range from 3% to 6.5% depending on your income level, with rates increasing at higher brackets.
  • Social Security benefits are fully exempt from West Virginia state income tax for all residents.
  • Military pensions and some other retirement income receive partial exemptions or deductions that reduce the amount subject to tax.
  • If you work in West Virginia but live elsewhere, you file a nonresident return and may claim a credit to avoid double taxation.

How West Virginia's tax brackets work

West Virginia uses a progressive tax system, meaning the rate you pay depends on how much you earn. Your income is divided into brackets, and each bracket is taxed at its own rate. You do not pay the highest rate on all your income — only on the portion that falls into that bracket.

The state updates its brackets annually to account for inflation. For the current tax year, the brackets begin at 3% for the lowest income tier and increase to 6.5% for income above a certain threshold. The exact dollar amounts where each bracket begins change each year, so you will need to check the West Virginia Department of Tax and Revenue website or your tax forms for the current year's brackets.

Your filing status (single, married filing jointly, head of household) also affects which bracket your income falls into. A married couple filing jointly reaches higher income levels before moving to the next tax bracket than a single filer with the same total income.

What income is taxed and what is exempt

Social Security benefits are completely exempt from West Virginia income tax. This applies to all residents regardless of age or income level. If Social Security is your only income, you will not owe state income tax on it.

Military pensions receive a deduction of up to $2,000 per year, which reduces the amount of pension income subject to tax. Other government pensions, including those from federal employment, may also may have access to for deductions, though the rules vary. Some types of retirement income, such as distributions from IRAs and 401(k)s, are fully taxable unless they may have access to for a specific exemption.

Interest and dividend income are taxable. Income from self-employment, rental property, and capital gains are also subject to tax. If you receive income from any of these sources, you will need to report it on your state return.

Filing requirements and who must file

You must file a West Virginia state income tax return if your income exceeds the threshold for your filing status. The threshold varies by year and by whether you are single, married, or head of household. Generally, the threshold is lower than the federal threshold, so you may need to file a state return even if you do not owe federal tax.

Nonresidents who work in West Virginia must also file if their income from West Virginia sources exceeds the filing threshold. You will file Form IT-100NR (Nonresident Income Tax Return) instead of the resident form. Nonresidents can claim a credit for taxes paid to West Virginia on their home state return to reduce double taxation.

Even if you do not owe tax, filing may be worth your time if you had taxes withheld from your paychecks or if you are due a refund from the federal government. Filing allows you to claim a refund of any state taxes that were over-withheld.

How to file your West Virginia state return

You can file your West Virginia return on paper or electronically. The state accepts e-file through approved tax software and tax preparers. Paper forms are available from the West Virginia Department of Tax and Revenue website. The filing deadline is typically April 15, the same as the federal deadline, though you can request an extension.

If you use tax software, most major programs include West Virginia forms and will calculate your state tax based on your income and filing status. If you file on paper, you will need Form IT-100 (Resident Income Tax Return) or Form IT-100NR if you are a nonresident. You will also need to include schedules for any income sources beyond wages, such as self-employment or investment income.

The West Virginia Department of Tax and Revenue does not process returns or answer tax questions by phone during the filing season. You can mail your return to the address listed on the form or file electronically. If you need help preparing your return, the state offers free tax preparation through the Volunteer Income Tax Assistance (VITA) program at certain locations during tax season.

Deductions and credits available to West Virginia residents

West Virginia allows a standard deduction, which reduces the amount of income subject to tax. The standard deduction amount depends on your filing status and age. If you are 65 or older, you may may have access to for an additional deduction. You can also itemize deductions if they exceed the standard deduction, though fewer people do this since the federal tax law changed in 2017.

The state offers a tax credit for property taxes paid on your primary residence, which can reduce your tax liability dollar-for-dollar. You must meet income limits to claim this credit, and the amount varies based on your income and the property taxes you paid. There is also a homestead property tax exemption for certain low-income seniors and disabled residents, though this is a property tax benefit rather than an income tax credit.

If you have dependent children, you may claim a dependent exemption on your state return. The amount of this exemption is set by the state and changes annually. You cannot claim a child tax credit on the state return the way you can on the federal return, but the dependent exemption serves a similar purpose by reducing your taxable income.

Frequently Asked Questions

Do I have to pay West Virginia income tax if I live out of state but work there?

Yes, you must file a nonresident return and pay tax on income earned in West Virginia. However, you can claim a credit on your home state return for taxes paid to West Virginia, which usually eliminates double taxation. The exact credit depends on your home state's rules.

Is my military pension taxed in West Virginia?

Military pensions receive a deduction of up to $2,000 per year, which means only the amount above $2,000 is subject to tax. If your pension is $2,000 or less, you owe no state income tax on it. Amounts above $2,000 are taxed at the normal rates.

What if I did not file a West Virginia return in previous years?

You can file back returns for prior years. The state generally looks back three years for refunds, though you can file older returns if you owe tax. Contact the West Virginia Department of Tax and Revenue to determine what years you need to file and whether you owe penalties or interest.

Can I file my West Virginia return without filing federal?

Yes, you can file a state return without filing federal, though this is uncommon. You would do this if you owe state tax but your federal income is below the federal filing threshold. However, most people who owe state tax also owe federal tax.