SB 120
Eliminating income tax on qualified tipped wages
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Sign in to take action- Introduced
- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill would allow West Virginia residents who work in tipped occupations to deduct a portion of their tips from their state income tax liability. Specifically, it creates a deduction for ‘qualified tips’ – those reported to the employer – which can be used to reduce federal adjusted gross income and, consequently, the state income tax owed. The deduction is limited to the amount of tips not already deducted at the federal level. The change would take effect beginning in 2027.
Key provisions
- Creates a deduction for ‘qualified tips’ received by tipped workers.
- ‘Qualified tips’ are defined as cash, credit/debit card charges, or checks reported to the employer.
- The deduction reduces federal adjusted gross income.
- The deduction is limited to the amount not already deducted at the federal level.
- The deduction is available regardless of the type of tax return filed.
- Effective for taxable years beginning January 1, 2027.
Who is affected
- West Virginia residents
- Workers in tipped occupations (e.g., restaurant servers, bartenders)
Notable changes
- Introduces a new deduction for qualified tips within the West Virginia personal income tax code.
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