This bill amends the Code of West Virginia to reinstate a personal income tax adjustment for certain retirees who receive pensions from defined benefit plans that have terminated and are now subject to reduced maximum benefit guarantees. Specifically, it allows these retirees to subtract from their federal adjusted gross income the difference between the maximum annual pension benefit they would have received had the plan not terminated and the actual benefit received from the guarantor. The bill also includes a provision that if the tax adjustment reduces state revenues by $2 million or more in any year, the Tax Commissioner must adjust the percentage of the reduction to limit the cost to $2 million for the following year.

Additionally, the bill updates the effective dates for this tax adjustment. It states that the adjustment will be effective for taxable years beginning on January 1, 2025, and will terminate for tax years after December 31, 2026. This replaces the previous provisions that set the adjustment to be effective from January 1, 2020, and terminating after January 1, 2028. The modification is available regardless of the type of tax return filed.

Statutes affected:
Introduced Version: 11-21-12d