On March 7, 2023, Governor Justice signed a historic tax bill into law for West Virginia. 1987 was the last time any significant change was made to the WV personal income tax rules. Suttle & Stalnaker recaps the changes for you below, along with the dates they become effective.
(Effective retroactively for tax years beginning on or after January 1, 2023)
- Cut to Personal Income Tax –
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- All income tax brackets are reduced by 21.25%.
- The new top income tax rate decreases from 6.50% to 5.12%.
- The West Virginia State Tax Division will issue revised withholding tables no later than April 1, 2023.
- Taxpayers who pay estimated payments may reduce their payments beginning on April 15, 2023 and thereafter.
- Possible future reductions: Beginning in 2025, certain triggers may occur and continue each year thereafter, to further reduce the tax rate.
(Effective for tax years beginning on or after January 1, 2024)
- Motor Vehicle Property Tax Credit –
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- Businesses and Individuals are eligible for the credit.
- Refundable tax credit is equal to the amount of motor vehicle property tax timely paid in during a personal income tax year or corporation income tax year on owned or leased vehicles.
- No credit is allowed for any untimely property tax paid, or any payment of delinquent property tax, or payment of “back tax” property taxes.
- The credit will be taken on annual income tax returns and will be applied against any income tax owed.
- If the credit amount is greater than the amount of income tax due, the difference may be refunded.
- Small Business Property Tax Credit –
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- Small Business is defined as a business with personal property located in this state with an aggregate appraised value of $1 million or less.
- Working interests in any oil, natural gas, or natural gas liquid producing property are excluded.
- Public service companies centrally assessed by the state for property tax purposes are excluded.
- Refundable tax credit is equal to 50% of the amount of personal property tax timely paid in during a calendar year.
- No credit is allowed for any untimely personal property tax paid, or any payment of delinquent personal property tax, or payment of “back tax” personal property taxes.
- The credit will be taken on annual income tax returns and will be applied against any income tax owed.
- If the credit amount is greater than the amount of income tax due, the difference may be refunded.
- Disabled veteran real property tax credit –
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- Honorably discharged from any branch of the armed services of the U.S. and is considered at least ninety percent totally and permanently disabled due solely to service-connected disabilities by the Department of Veterans Affairs.
- Refundable tax credit is equal to the amount of West Virginia real property tax timely paid on his or her homestead during the personal income taxable year.
- No credit is allowed for any untimely real property tax paid, or any payment of delinquent real property tax, or payment of “back tax” real property taxes.
- The credit will be taken on annual income tax returns and will be applied against any income tax owed.
- If the credit amount is greater than the amount of income tax due, the difference may be refunded.
Contact your Suttle & Stalnaker representative or one of our offices with questions.