FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 05:49 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1170 |
Introduced |
HB4101 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
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 provide a personal income tax exemption for families with four or more children.
According to our interpretation, the bill would create a personal income tax exemption for married individuals and surviving spouses with four or more dependent children. Definitions are stated for, “married individual”, “surviving spouse”, and “dependent child” and align with those definitions found in the Internal Revenue Code. Married individuals or a surviving spouse are eligible for the exemption beginning in the tax year in which they claim a fourth dependent child. The language regarding subsequent tax years is unclear but appears to indicate that the taxpayer would still be eligible for the exemption if they file as a “married individual” or “surviving spouse”. The bill, if passed, would apply to tax years beginning on or after January 1, 2027.
Per our interpretation, the bill, if passed, would decrease General Revenue collections by at least $37 million in FY2028 and by increasing amounts in subsequent years. This type of exemption has the potential to strongly impact taxpayer filing behavior which could lead to a significant increase in the cost of the exemption in future years.
Additional administrative costs incurred by the State Tax Division would be $87,300 in FY2027 and $67,500 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
87,300 |
67,500 |
| Personal Services |
0 |
67,500 |
67,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
3,300 |
0 |
| Other |
0 |
16,500 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-37,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the bill would create a personal income tax exemption for married individuals and surviving spouses with four or more dependent children. Definitions are stated for, “married individual”, “surviving spouse”, and “dependent child” and align with those definitions found in the Internal Revenue Code. Married individuals or a surviving spouse are eligible for the exemption beginning in the tax year in which they claim a fourth dependent child. The language regarding subsequent tax years is unclear but appears to indicate that the taxpayer would still be eligible for the exemption if they file as a “married individual” or “surviving spouse”. The bill, if passed, would apply to tax years beginning on or after January 1, 2027.
Per our interpretation, the bill, if passed, would decrease General Revenue collections by at least $37 million in FY2028 and by increasing amounts in subsequent years. This type of exemption has the potential to strongly impact taxpayer filing behavior which could lead to a significant increase in the cost of the exemption in future years.
Additional administrative costs incurred by the State Tax Division would be $87,300 in FY2027 and $67,500 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to provide a personal income tax exemption for families with four or more children.
The tax exemption is only available to “married individuals” and a “surviving spouse”. Other Taxpayers with four or more qualifying dependent children would not be eligible for the exemption. It is possible that some form of “equal protection” objection may be raised.
The language of the new statute grants an exemption, “Beginning in the tax year when a married individual or surviving spouse claims a fourth dependent child, and in all subsequent tax years in which the individual files as a married individual or surviving spouse, …”[emphasis added.] The absence of the phrase, “and claims a fourth dependent child,” in addressing subsequent tax years could grant exemptions in subsequent years, without regard to whether a fourth child is claimed as a dependent. The exemption language is found in a subdivision or a subsection entitled “Definitions and applicability.” It might be better set forth in a separate subsection.
Subsection (c) reads at one point, “remained” when it should likely read “remainder”.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov