FISCAL NOTE
Date Requested: January 15, 2026
Time Requested: 04:12 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2820 |
Introduced |
HB4014 |
|
|---|
| CBD Subject: |
Economic Development |
|---|
|
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 all related to the Workforce Readiness and Opportunity Initiatives Act including by establishing the West Virginia Micro-Credential Program, expanding the apprenticeship training tax credit, allowing for independent contractors to have portable benefits which hiring parties can contribute to without altering the nature of the relationship, providing for tax treatment of portable benefits, and eliminating barriers to professional licensures for military trained applicants.
According to our interpretation, this bill creates new programs and amends existing Code to promote additional workforce readiness initiatives with an aim to grow the State’s workforce and workforce productivity. The proposed West Virginia Micro-Credential Program would validate skills and competencies attained through project-based or experiential learning outside the traditional classroom.
The Apprenticeship Training Tax Credits would also be amended beyond the construction trades beginning for taxable years on or after January 1, 2026. The annual cost of the current program costs $0.3 million per year. The enhanced program would add a small additional amount or cost to this program with tax credits equal to $2 per hour not to exceed $2,000 for non-construction trade apprenticeships.
According to the U.S. Department of Labor’s Office of Apprenticeship, between FY2015 and FY2024, the number of active apprentices in West Virginia declined from 5,261 to 4,115, a reduction of 21.8%. This modified tax credit would generate a greater loss to the General Revenue Fund compared to the existing Apprenticeship Training Credit, which costs roughly $300,000 per year. We cannot readily quantify the number of additional apprentices who would qualify for the modified credit. However, based on available information, most tax credit claims will likely continue to be related to the construction industry.
This bill also creates new decreasing Personal Income Tax modifications effective for taxable years beginning on or after January 1, 2026, for contributions to a voluntary portable benefit plan as established under a proposed Voluntary Portable Benefits Act also contained within this proposed bill. The decreasing modifications are available only to the extent that such contributions and related benefits are not otherwise allowed as a deduction when arriving at the taxpayer’s federal adjusted gross income. There is also a proposed decreasing adjustment to federal taxable income for Corporation Net Income Tax effective for taxable years beginning on or after January 1, 2026, for contributions to a voluntary portable benefits plan. This decreasing adjustment is available only to the extent that such contributions are not otherwise allowed as a deduction when arriving at the taxpayer’s federal taxable income.
The proposed Voluntary Portable Benefits Plan Act allows voluntary withholdings from independent contractors for purposes of an approved Department of Labor Voluntary Portable Benefits Plan. Nationally, nearly 80 percent of independent contractors would like to access flexible or portable benefits, which are benefits that are not tied to a particular job or employer, but travel with the worker. Passage of this bill would reduce General Revenue Fund collections by undetermined amount dependent upon the amount of contributions to portable benefits accounts for independent contractors not otherwise subject to federal and State tax exclusion. The proposed bill does not contain any cap on amount of contributions subject to deductibility for State tax purposes.
Additional administrative costs incurred by the State Tax Department would be $46,150 in FY2027 and $22,500 per year 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 |
46,150 |
22,500 |
| Personal Services |
0 |
22,500 |
22,500 |
| Current Expenses |
0 |
1,650 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
11,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill creates new programs and amends existing Code to promote additional workforce readiness initiatives with an aim to grow the State’s workforce and workforce productivity. The proposed West Virginia Micro-Credential Program would validate skills and competencies attained through project-based or experiential learning outside the traditional classroom.
The Apprenticeship Training Tax Credits would also be amended beyond the construction trades beginning for taxable years on or after January 1, 2026. The annual cost of the current program costs $0.3 million per year. The enhanced program would add a small additional amount or cost to this program with tax credits equal to $2 per hour not to exceed $2,000 for non-construction trade apprenticeships.
According to the U.S. Department of Labor’s Office of Apprenticeship, between FY2015 and FY2024, the number of active apprentices in West Virginia declined from 5,261 to 4,115, a reduction of 21.8%. This modified tax credit would generate a greater loss to the General Revenue Fund compared to the existing Apprenticeship Training Credit, which costs roughly $300,000 per year. We cannot readily quantify the number of additional apprentices who would qualify for the modified credit. However, based on available information, most tax credit claims will likely continue to be related to the construction industry.
This bill also creates new decreasing Personal Income Tax modifications effective for taxable years beginning on or after January 1, 2026, for contributions to a voluntary portable benefit plan as established under a proposed Voluntary Portable Benefits Act also contained within this proposed bill. The decreasing modifications are available only to the extent that such contributions and related benefits are not otherwise allowed as a deduction when arriving at the taxpayer’s federal adjusted gross income. There is also a proposed decreasing adjustment to federal taxable income for Corporation Net Income Tax effective for taxable years beginning on or after January 1, 2026, for contributions to a voluntary portable benefits plan. This decreasing adjustment is available only to the extent that such contributions are not otherwise allowed as a deduction when arriving at the taxpayer’s federal taxable income.
The proposed Voluntary Portable Benefits Plan Act allows voluntary withholdings from independent contractors for purposes of an approved Department of Labor Voluntary Portable Benefits Plan. Nationally, nearly 80 percent of independent contractors would like to access flexible or portable benefits, which are benefits that are not tied to a particular job or employer, but travel with the worker. Passage of this bill would reduce General Revenue Fund collections by undetermined amount dependent upon the amount of contributions to portable benefits accounts for independent contractors not otherwise subject to federal and State tax exclusion. The proposed bill does not contain any cap on amount of contributions subject to deductibility for State tax purposes.
Additional administrative costs incurred by the State Tax Department would be $46,150 in FY2027 and $22,500 per year in subsequent fiscal years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov