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West Virginia Retirement Tax Friendliness

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Overview of West Virginia Retirement Tax Friendliness

Social Security benefits and other types of retirement income are taxed in West Virginia, but seniors can claim a deduction to offset some of those taxes. West Virginia has some of the lowest property taxes in the U.S, and its sales taxes are also quite low.

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Annual Social Security Income
Annual Retirement Account Income
Annual Wages
Year of Birth
Filing Status
Annual Income from Private Pension
Annual Income from Public Pension
You will pay of West Virginia state taxes on your pre-tax income of
Your Tax Breakdown
Total Taxes
Quick Guide to Retirement Income Taxes
is toward retirees.
Social Security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, and your marginal state tax rate is %.
  • Our Tax Expert

    Jennifer Mansfield, CPA Tax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program. more
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West Virginia Retirement Taxes

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West Virginia is called The Mountain State and for good reason. Mountains and forest blanket nearly the entire area within its borders, from the Alleghenies that run along the state’s eastern border to the Ohio River Valley in the west. For retirees who love outdoor activities like kayaking, birding, fishing and hiking, West Virginia can be a great choice.

It isn’t just the state’s natural beauty that makes it a good retirement destination, however. The state is also very affordable, with a tax system that's friendly toward retirees. West Virginia has some of the lowest property taxes in the U.S., and sales taxes are fairly cheap.

As described below, Social Security benefits and other types of retirement income are taxed in West Virginia, but seniors can claim a deduction to offset them. That, combined with West Virginia’s low cost of living, means it can be possible for a retiree to live in the state on a relatively small annual income.

A financial advisor in West Virginia can help you plan for retirement and other financial goals. Financial advisors can also help with investing and financial plans, including taxes, homeownership, insurance and estate planning, to make sure you are preparing for the future.

Is West Virginia tax-friendly for retirees?

The state is tax-friendly, although how tax-friendly it is may depend on your level of income. For starters, West Virginia has very low property and sales taxes. Most of the Social Security retirement benefits that are taxed federally will also be taxed in West Virginia, at rates ranging from 3% to 6.5%.

Other types of retirement income are also taxable, but can be deducted up to $8,000 per person. Thus, if you have significant retirement income from, say, an IRA, your taxes in West Virginia may be quite high. On the other hand, if you rely mostly on Social Security income with only supplemental income from a pension or retirement account, your tax bill will be fairly low.

Is Social Security taxable in West Virginia?

A certain percentage of the Social Security retirement benefits that are taxable on your federal tax return will also be taxable on your West Virginia state tax return. For tax year 2020, taxpayers can exclude 35% of their federally taxed Social Security benefits on their state tax return if their federal AGI is below $50,000 (single filers) or $100,000 (joint filers). For 2021, this percentage will increase to 65%. In 2022 and beyond, all Social Security benefits will be exempt from taxes in West Virginia.

Are other forms of retirement income taxable in West Virginia?

Retirement income from a government pension, private employer pension, 401(k), IRA or any other type of retirement account is taxable. Seniors in West Virginia, meaning anyone 65 or older, can claim a deduction against that income. The deduction is $8,000 per person and applies across all forms of retirement income.

So if you have $4,000 annually in pension income and $4,000 in income from an IRA, you will not need to pay income taxes on that retirement income. If the sum exceeds $8,000, however, you will pay tax on at the rates shown in the income tax table below.

There is an additional $2,000 deduction available to taxpayers with government pension income. There is no age limit for this deduction, but it only applies to income from a government pension.

Income Tax Brackets

Single Filers
West Virginia Taxable IncomeRate
$0 - $10,0003.00%
$10,000 - $25,0004.00%
$25,000 - $40,0004.50%
$40,000 - $60,0006.00%
Married, Filing Jointly
West Virginia Taxable IncomeRate
$0 - $10,0003.00%
$10,000 - $25,0004.00%
$25,000 - $40,0004.50%
$40,000 - $60,0006.00%
Married, Filing Separately
West Virginia Taxable IncomeRate
$0 - $5,0003.00%
$5,000 - $12,5004.00%
$12,500 - $20,0004.50%
$20,000 - $30,0006.00%
Head of Household
West Virginia Taxable IncomeRate
$0 - $10,0003.00%
$10,000 - $25,0004.00%
$25,000 - $40,0004.50%
$40,000 - $60,0006.00%

How high are property taxes in West Virginia?

West Virginia has some of the lowest property taxes of any U.S. state. The median property tax paid by homeowners in West Virginia is just $711 per year.

Part of the reason that property taxes due are so low is that tax rates and home values are generally quite low. The state’s average effective rate is 0.57%, and the median home value is less than $125,000. Those low costs can be a major help for seniors looking to move from another part of the country.

What is the West Virginia homestead exemption?

Photo credit: © Pecha

The West Virginia homestead exemption program helps to lower the property tax burden on seniors. It is available to anyone age 65 or older who owns and occupies their home and has paid taxes on that home for at least two consecutive years prior to applying for the exemption. Qualifying homeowners receive an exemption of $20,000 on the assessed value of the property.

How high are sales taxes in West Virginia?

West Virginia's sales tax rate is fairly low at 6%. A small number of cities also collect local rates ranging from 0.5% to 1%. The total rate in Charleston, the state capital, is 7%. West Virginia also has sales tax exemptions for groceries and prescription drugs.

What other West Virginia taxes should I be concerned about?

West Virginia no longer has an estate tax. Otherwise, there are no other major taxes that retirees need to worry about. There are sin taxes, which every state charges on goods like alcohol and cigarettes, but West Virginia’s are among the lowest in the U.S.

Most Tax Friendly Places for Retirees

SmartAsset’s interactive map highlights the places in the country with tax policies that are most favorable to retirees. Zoom between states and the national map to see the most tax-friendly places in each area of the country.

Rank City Income Tax Paid Property Tax Rate Sales Tax Paid Fuel Tax Paid Social Security Taxed?

Methodology To find the most tax friendly places for retirees, our study analyzed how the tax policies of each city would impact a theoretical retiree with an annual income of $50,000. Our analysis assumes a retiree receiving $15,000 from Social Security benefits, $10,000 from a private pension, $10,000 in wages and $15,000 from a retirement savings account like a 401(k) or IRA.

To calculate the expected income tax this person would pay in each location, we applied the relevant deductions and exemptions. This included the standard deduction, personal exemption and deductions for each specific type of retirement income. We then calculated how much this person would pay in income tax at federal, state, county and local levels.

We calculated the effective property tax rate by dividing median property tax paid by median home value for each city.

In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a city by the household income after subtracting income tax. This product is then multiplied by 35% to estimate the sales tax paid.

For fuel taxes, we first distributed statewide vehicle miles traveled to the city level using the number of vehicles in each county. We then calculated miles driven per capita in each city. Using the nationwide average fuel economy, we calculated the average gallons of gas used per capita in each city and multiplied that by the fuel tax.

For each city we determined whether or not Social Security income was taxable.

Finally, we created an overall index weighted to best capture the taxes that most affect retirees. The income tax category made up 40% of the index, property taxes accounted for 30%, sales taxes 20% and fuel taxes 10%.

Sources: Internal Revenue Service, Social Security Administration, state websites, local government websites, US Census Bureau 2018 American Community Survey, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration