FISCAL NOTE
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to exempt Social Security benefits and certain pension benefits from West Virginia personal income tax.
The bill, as written, increases the modification for retirement income received in pensions and annuities from the Public Employees Retirement System, the West Virginia Teachers Retirement System and the federal retirement system to include all retirement income received from those sources. The bill also increases the modification for military retirees to include all military pension income. In addition, the bill proposes a modification that would reduce federal adjusted gross income, for West Virginia Personal Income Tax purposes, by the amount of Social Security benefits paid to the extent that the benefits are included in federal adjusted gross income. These changes are effective beginning with the 2015 tax year. Passage of this bill would result in a decrease in General Revenue Fund collections of $112.2 million beginning in FY2016. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
There would be no additional costs to the State Tax Department.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2014 Increase/Decrease (use"-") |
2015 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 |
-11,220,000 |
Explanation of above estimates (including long-range effect):
The bill, as written, increases the modification for retirement income received in pensions and annuities from the Public Employees Retirement System, the West Virginia Teachers Retirement System and the federal retirement system to include all retirement income received from those sources. The bill also increases the modification for military retirees to include all military pension income. In addition, the bill proposes a modification that would reduce federal adjusted gross income, for West Virginia Personal Income Tax purposes, by the amount of Social Security benefits paid to the extent that the benefits are included in federal adjusted gross income. These changes are effective beginning with the 2015 tax year. Passage of this bill would result in a decrease in General Revenue Fund collections of $112.2 million beginning in FY2016. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
There would be no additional costs to the State Tax Department.
Memorandum
Person submitting Fiscal Note: Mark B. Muchow
Email Address: Roger.D.Cox@wv.gov