2026 Regular Session
SB 460
Establishing no tax on tips or overtime compensation
In Committee
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- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill proposes to eliminate state personal income tax on tips and overtime compensation earned by West Virginia residents. Employers would still be required to report these earnings, but no tax would be assessed on them. This aims to support the state’s service industry and potentially boost tourism by making wages more attractive.
Key provisions
- Exempts tips and overtime compensation from West Virginia personal income tax.
- Requires employers to report tips and overtime earnings.
- Allows taxpayers to deduct amounts related to tips and overtime from their federal adjusted gross income.
- Specifies modifications to federal adjusted gross income for West Virginia tax purposes, including deductions for retirement income and social security benefits.
- Establishes a tiered system for social security benefit deductions based on income levels.
- Includes provisions for fiduciary adjustments related to estates and trusts.
- Updates withholding tax requirements to reflect the new tax treatment of tips and overtime.
- Introduces changes to the calculation of the West Virginia adjusted gross income, including modifications for military retirement income and changes to the social security deduction.
Who is affected
- West Virginia residents
- Service industry workers (e.g., restaurant staff, retail employees)
- Employers in West Virginia
- Taxpayers
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