In 2017, the Legislature passed a much-deserved income tax relief bill for the citizens who are receiving military retirement benefits. This relief has been adopted by half the states. Based on 2015 data from West Virginia Veterans Affairs, there are 35,650 individuals receiving disability compensation or pension benefits.
At the same time, there was much discussion about tax relief for many on Social Security. West Virginia continues to tax Social Security benefits, which are received by 25 percent of the state population. There are about 312,000 residents age 65 or above. There are 455,850 citizens of the state who receive some form of Social Security benefit. Of those who have worked to retirement age, 92 percent receive Social Security. West Virginia is one of only 13 states that continues to levy income taxes on those benefits.
Each dollar these beneficiaries receives generates $1.61 in economic output. The amount paid in taxes does not generate this output for West Virginia.
Based on the latest AARP report (2014 data), the average benefit received is $14,441. This benefit lifts 52 percent of the 65-plus population above the poverty level. Social Security income is over 50 percent of the income for 68 percent of those who worked, raised families and paid income taxes and are now over 65 years of age. Likely, many of those receiving military pensions are receiving and paying taxes on their Social Security. All workers have previously paid income tax on their Social Security deductions each pay period.
Therefore, it is past time for the Legislature to enact the tax relief bill for those deserving individuals who worked here and chose to retire here.