HB 4963
Relating to establishing an additional modification reducing federal adjusted gross income relating to taxes on tips and overtime
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- Passed House of Delegates
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill proposes an additional modification to West Virginia’s state income tax to reduce taxpayers’ federal adjusted gross income. It allows for deductions for qualified tips and overtime compensation, mirroring federal rules. The modification is phased out for taxpayers with modified adjusted gross incomes exceeding $150,000, and only applies to tips and overtime earned while performing services within West Virginia for nonresidents.
Key provisions
- Allows deductions for qualified tips and overtime compensation.
- The modification is available for taxable years beginning January 1, 2026, and before January 1, 2029.
- The modification is available for taxable years beginning January 1, 2029, up to $25,000 annually.
- The modification phases out for taxpayers with modified adjusted gross incomes over $150,000.
- Only applies to tips and overtime earned while performing services in West Virginia.
- Nonresidents are only eligible for the modification if the tips and overtime are attributable to services performed in West Virginia.
- The modification is available regardless of the type of return form filed.
Who is affected
- Taxpayers in West Virginia
- Nonresidents of West Virginia earning income while performing services in West Virginia
Notable changes
- Introduces a new modification to reduce federal adjusted gross income.
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