FISCAL NOTE
Date Requested: January 12, 2022
Time Requested: 03:59 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1142 |
Introduced |
SB46 |
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| CBD Subject: |
|
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FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to fully eliminate state income tax for Social Security benefits received by taxpayers for taxable years beginning in 2022.
According to our interpretation of this bill, this bill exempts all Social Security benefits from personal income tax without any income restrictions for tax years beginning on or after January 1, 2023. Under current law, a decreasing modification for Social Security benefits is allowed when the federal adjusted gross income of a married couple filing a joint return does not exceed $100,000, or $50,000 in the case of a single individual or a married individual filing a single return. Current statute allows 35 percent of the amount of Social Security benefits included in federal adjusted gross income for taxable years beginning on or after January 1, 2020, to be excluded for taxpayers in those income brackets. For taxable years beginning on or after January 1, 2021, this reduction increased to 65 percent and on January 1, 2022, it increased to 100 percent.
Passage of this bill would reduce General Revenue Fund collections by roughly $27.0 million in FY2024. The provisions of this bill would exclude all federally taxable Social Security benefits from Personal Income Tax beginning in tax year 2023. The value of the proposed tax exclusion will grow over time as the population ages and the number of individuals receiving Social Security benefits increases.
Additional administrative costs incurred by the State Tax Department would be $56,500 in FY2024 and $45,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
45,000 |
| Personal Services |
0 |
0 |
45,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, this bill exempts all Social Security benefits from personal income tax without any income restrictions for tax years beginning on or after January 1, 2023. Under current law, a decreasing modification for Social Security benefits is allowed when the federal adjusted gross income of a married couple filing a joint return does not exceed $100,000, or $50,000 in the case of a single individual or a married individual filing a single return. Current statute allows 35 percent of the amount of Social Security benefits included in federal adjusted gross income for taxable years beginning on or after January 1, 2020, to be excluded for taxpayers in those income brackets. For taxable years beginning on or after January 1, 2021, this reduction increased to 65 percent and on January 1, 2022, it increased to 100 percent.
Passage of this bill would reduce General Revenue Fund collections by roughly $27.0 million in FY2024. The provisions of this bill would exclude all federally taxable Social Security benefits from Personal Income Tax beginning in tax year 2023. The value of the proposed tax exclusion will grow over time as the population ages and the number of individuals receiving Social Security benefits increases.
Additional administrative costs incurred by the State Tax Department would be $56,500 in FY2024 and $45,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to fully eliminate state income tax for Social Security benefits received by taxpayers for taxable years beginning in 2022.
The bill title lists several changes, but the bill only has one change. The bill extends the exemption for Social Security benefits to all taxpayers beginning in tax year 2023. The date is inconsistent with the date given in the stated purpose of the bill.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov