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West Virginia | Tax Credits for Working Families

Tax Credits for Working Families

West Virginia

Earned Income Tax Credit^

State Income Tax: Graduated 3-6.5 percent

State EITC: No

Notes/News: In 2007, West Virginia established a limited low-income earned exclusion called the Family Tax Credit (FTC), which decreases or eliminates the income tax liability for taxpayers below the federal poverty line. A coalition of advocates led by the West Virginia Center on Budget & Policy and the Alliance for Sustainable Families has lobbied to replace the FTC with a refundable state EITC during the past three legislative sessions. The West Virginia Legislature introduced a bill to establish a state EITC equal to 20 percent of the federal EITC in January 2010. In February 2011, H.B. 3228 and S.B. 576 were also introduced to provide a state EITC of 10 percent of the federal credit. A state EITC based on the federal credit would provide the most generous benefits to working families with children.

Reports/Materials: West Virginia State & Local Taxes,” from Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, Institute on Taxation and Economic Policy, January 2013

Giving Credit to West Virginia: A State EITC Would Help Struggling Families, Elizabeth Paulhus, West Virginia Center on Budget and Policy, February 2011

Giving Credit to West Virginia’s Working Families: Reasons to Support a State Earned Income Tax Credit, West Virginia Center on Budget and Policy & West Virginia Alliance for Sustainable Families, February 2011

Giving Credit to West Virginia’s Working Families: Using TANF to fund a State Earned Income Tax Credit, West Virginia Center on Budget and Policy & West Virginia Alliance for Sustainable Families, February 2011

Giving Credit to West Virginia’s Working Families, West Virginia Center on Budget and Policy, February 2010

West Virginia: State and Local Taxes in 2007, Institute on Taxation and Economic Policy, November 2009

Making Work Pay: A State Earned Income Tax Credit for West Virginia, West Virginia Center on Budget and Policy, January 2009

Making Work Pay: A State Earned Income Tax Credit for West Virginia, West Virginia Center on Budget and Policy, September 2008

A State Earned Income Tax Credit Would Benefit More West Virginians than State Family Tax Credit, West Virginia Center on Budget and Policy, August 2008

Sample letter in support of a state EITC, West Virginia Alliance for Sustainable Families

Sample statement of support for a state EITC, West Virginia Alliance for Sustainable Families

Child Tax Credit^

State Credit: No

Child and Dependent Care Tax Credit^

State Credit: No

Reports/Materials: Reducing Child Care Assistance – The Impact on West Virginia’s Low-Income Working Families. West Virginia Center on Budget and Policy, November 2012

Property Tax Circuit Breaker^

Circuit Breaker: Yes, called the Homestead Excess Property Tax Credit

Refundable: Yes

Year Enacted: 2008

Eligibility: All homeowners can receive a credit up to $1,000 for all property taxes paid that exceed 4 percent of their gross household income.

News/Notes: Prior to the 2012 tax year, eligible senior citizens and persons with disabilities must choose between applying for the circuit breaker and a refundable Senior Citizens Tax Credit for Property Taxes Paid, which covers property taxes paid on the first $20,000 of  a home’s assessed value. The refundable tax credit for seniors is a better option for almost all seniors or persons with disabilities, having provided nearly $8.2 million in  relief to 43,000 qualifying taxpayers in 2009.

In March 2011, the West Virginia Legislature enacted legislation to streamline the state’s property tax relief system while also increasing the amount of benefits for some low-income senior citizens. The bill reforms the way homeowners apply for the circuit breaker and the refundable credit for seniors, and allows qualifying seniors to claim both of these programs. It also eliminates two additional property tax relief programs available to seniors, a property tax deferment and another circuit breaker credit program, both of which went unused in 2009 and 2010.

Reports/Materials: “West Virginia State & Local Taxes,” from Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, Institute on Taxation and Economic Policy, January 2013

Property Taxes: A West Virginia Primer, West Virginia Center on Budget and Policy, April 2011