FISCAL NOTE
Date Requested: January 10, 2020
Time Requested: 03:55 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1499 |
Introduced |
HB4072 |
|
|---|
| 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 remove the income cap for eligibility for the exemption from state taxation of social security benefits.
According to our interpretation of this bill, under current law, the 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. This bill would remove the income limitation for the reducing modification of social security benefits. For taxable years beginning on or after January 1, 2020, 35% of the amount of social security benefits included in federal adjusted gross income for the taxable year is eligible for a reducing modification. On January 1, 2021, this reduction increases to 65% and on January 1, 2022 it increases to 100%.
Passage of this bill would reduce General Revenue Fund collections by roughly $7.0 million in FY2022, $16.0 million in FY2023, and $26.0 million in FY2024. 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.
No additional administrative costs would be incurred by the State Tax Department.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| 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 |
-26,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, under current law, the 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. This bill would remove the income limitation for the reducing modification of social security benefits. For taxable years beginning on or after January 1, 2020, 35% of the amount of social security benefits included in federal adjusted gross income for the taxable year is eligible for a reducing modification. On January 1, 2021, this reduction increases to 65% and on January 1, 2022 it increases to 100%.
Passage of this bill would reduce General Revenue Fund collections by roughly $7.0 million in FY2022, $16.0 million in FY2023, and $26.0 million in FY2024. 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.
No additional administrative costs would be incurred by the State Tax Department.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov