Group of mature men walking together – Fg Trade\/Getty Images <\/p>\n
Many new retirees are unsure\u00a0whether or not they need to pay taxes on Social Security<\/a>, and the answer to that question depends heavily on their location. As far as federal taxes are concerned, the Social Security Administration<\/a> (SSA) states that 85% of Social Security benefits are taxable when a retiree files as an individual and their total income exceeds\u00a0$25,000; if filing a joint return, this 85% rule is triggered when the spouses have a combined income greater than $32,000. These regulations can especially help people qualifying as lower-class retirees<\/a>.<\/p>\n When referring to state income taxes, regulations differ. As of 2026, eight states still do tax these benefits under certain circumstances,\u00a0though that number was actually nine\u00a0until quite recently. In 2026, retirees in West Virginia will join those in 41 other states no longer required to pay income taxes on their Social Security benefits. Legislators in the Mountain State took a phased approach, passing House Bill 4880 in 2024\u00a0with bipartisan support and implementing a 35% tax cut that year. In 2025, the tax break\u00a0increased to 65% and, in 2026, the state’s\u00a0nearly half a million\u00a0Social Security recipients will no longer pay state income taxes on their benefits. Couple that with the bigger Social Security checks arriving in January 2026<\/a> thanks to the recently increased cost-of-living\u00a0adjustment, and there’s plenty of reason for West Virginian retirees to celebrate.<\/p>\n Read more: 10 States No One Should Ever Retire In<\/a><\/p>\n In an interview with WTOV9<\/a> in December 2025, West Virginia Delegate Jonathan Pinson noted how having money previously paid in taxes stay in a retiree’s pocket can allow them to pay for a month’s grocery bill and otherwise spend money in the area. Highlighting how this change could benefit the state’s economy at large, he noted, “For every one dollar that remains local, we see that it generates about a dollar and a half of local economic activity.” Meanwhile,\u00a0CapitalOne Shopping Research<\/a>\u00a0reports that those\u00a0who live in areas where they can access small businesses drive 26% less, reducing money spent on gasoline and multiplying cost savings. Democratic Delegate Sean Hornbuckle shared another way in which this new law can help West Virginia, observing to WTOV9, “When people are looking to make their retirement income go further, taxation is one of the key things that they look at. Now that we are able to compete better, especially with our surrounding states, I think that makes us more of a viable option.” As more retirees move into the state, local spending will increase even further.<\/p>\n Although the legislation passed will impact retirees’ bank accounts positively,\u00a0it also reduces the state budget for West Virginia by about $37 million. However, Hornbuckle says this reduction could leave room to further stimulate the economy by incentivizing the state to create more jobs, providing more than just Social Security recipients a reason to move to the state.<\/p>\n Unlock your financial potential. Add Money Digest to your preferred sources<\/a> for smart money insights!<\/p>\n West Virginia State Capitol – Mihai_Andritoiu\/Shutterstock <\/p>\n