Social Security Proposal Could Boost Income for Thousands

Republican Governor Jim Justice has proposed a complete axing of Social Security taxes in West Virginia.

Justice said in his final State of the State Address on Wednesday, January 10 that, after a gradual whittling down of tax rates on state-funded income, all taxes that can be applied to Social Security should be wiped out entirely. Newsweek contacted Governor Jim Justice's office for comment on Tuesday via email.

Making a further announcement on X, formerly Twitter, Justice posted: "We've cut taxes 23 times since I took office in 2017, and this year I proposed three additional tax cuts in my budget: eliminating the tax on social security, a childcare tax credit, and an expansion to the Homestead exemption."

In 2019, West Virginia enacted legislation to initiate the gradual elimination of Social Security taxes for individuals with incomes below $50,000 for single filers; or $100,000 for those who are married and filing jointly. Starting from the 2020 tax year, the state provided a 35 percent exemption on benefits for eligible taxpayers. This percentage rose to 65 percent as of 2021 and reached 100 percent in 2022.

Justice's new proposal would extend the exemption to all Social Security recipients regardless of their income.

The majority of Americans are liable for federal income tax on their Social Security retirement benefits, although some SSA [Social Security Administration] payments are excluded from taxation. Individuals with lower overall retirement income receive more substantial exemptions. Social Security is generally not subject to state taxes in most states.

Supplemental Security Income (SSI), a different type of benefit, remains non-taxable. Those who receive Social Security Disability Insurance (SSDI) may also be taxed on payments made to them.

Taxes on retirement benefits also vary depending on which state you live in. Currently, according to Bankrate, the following states levy a tax on Social Security income: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont.

Justice's proposal has been applauded by representatives from AARP, formerly the American Association of Retired Persons, which advocates for elderly and retired citizens.

"We were surprised and delighted, frankly, that he offered the proposal for the Legislature's consideration," Gaylene Miller, state director for AARP West Virginia, told the West Virginia MetroNewsradio network. "And I will tell you, that this is the number one issue among our members that we hear from them, that they feel that we should exert our influence on the legislation to fully eliminate the tax on Social Security."

Tom Hunter, spokesman for AARP West Virginia, told the radio outlet: "This [Social Security] was a program that was designed to lift seniors out of poverty. It wasn't a program that was designed to fund state governments. So we believe this is a step in the right direction."