SB 492
Establishing additional modification reducing federal adjusted gross income relating to taxes on tips and overtime
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- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill creates an additional deduction for West Virginia taxpayers when calculating their federal adjusted gross income. It allows for a reduction in federal income tax based on qualified tips and overtime compensation, mirroring deductions available at the federal level. The deduction 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 a deduction for qualified tips and overtime compensation.
- The deduction is available for taxable years beginning on or after January 1, 2026.
- The deduction 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 deduction if the tips and overtime are attributable to services performed in West Virginia.
- The deduction is available regardless of the type of return form filed.
Who is affected
- West Virginia taxpayers
- Employees who receive tips and overtime compensation
- Nonresidents performing services in West Virginia
Notable changes
- Establishes a new deduction for tips and overtime income.
- Phases out the deduction for taxpayers with high modified adjusted gross incomes.
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