Bill > SB492

This bill establishes an additional way for West Virginia taxpayers to reduce their federal adjusted gross income, which is the income used to calculate federal taxes. Specifically, for taxable years beginning between January 1, 2026, and January 1, 2029, taxpayers can subtract the amount of qualified tips and qualified overtime compensation they reported on their federal tax returns. Qualified tips are defined by federal law (26 U.S.C. § 224) and generally refer to tips received directly from customers or through tip-sharing arrangements. Qualified overtime compensation is also defined by federal law (26 U.S.C. § 225) and refers to extra pay for working beyond regular hours. For non-residents, only tips and overtime earned while working in West Virginia qualify for this reduction. Starting January 1, 2029, the bill allows a further reduction for qualified tips up to $25,000 annually and qualified overtime compensation up to $12,500 annually, with these amounts phasing out for individuals earning over $150,000 in modified adjusted gross income, and this reduction is available regardless of the tax form filed. Again, for non-residents, only income earned in West Virginia is eligible.

Budget and Finance

http://www.wvlegislature.gov/Bill_Status/Bills_history.cfm?input=492&year=2026&sessiontype=RS&btype=bill