Yes, West Virginia does tax pensions, but usually less than the starting point suggests. The state begins with your federal adjusted gross income, which includes pension payments, then lets you subtract specific amounts depending on the type of pension. Military retirement pay and West Virginia public safety pensions come out entirely. Pensions from the state’s Public Employees Retirement System, the Teachers Retirement System, and federal government service get a $2,000 deduction. Anyone 65 or older can subtract up to $8,000 more from any remaining income. What survives all of that is taxed at rates between 2.22% and 4.82%.
How West Virginia Arrives at a Taxable Number
The state uses your federal adjusted gross income as its starting figure.1West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual Every dollar of pension income, 401(k) withdrawal, and traditional IRA distribution reported on your federal return counts here too.
From that federal AGI, West Virginia allows a series of subtractions the tax code calls “decreasing modifications.” Each pension type has its own rule for how much comes off. Some are wiped out completely; others get a fixed cap; the rest lean on the broader senior citizen deduction.
Pensions That Are Fully Exempt
Two categories of pension income are excluded in full, no age requirement, no income cap.
Military retirement pay. Retirement income from every branch of the uniformed services is fully excluded: Army, Navy, Marines, Air Force, Coast Guard, Public Health Service, National Oceanic and Atmospheric Administration, the Reserves, and the National Guard. Survivor Benefit Plan annuities derived from military retirement also come out in full.2West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
West Virginia public safety pensions. Benefits from any West Virginia state or local police retirement system, the Deputy Sheriff Retirement System, the Firemen’s Retirement System, and the State Police Death, Disability and Retirement Fund receive a full exclusion, as do the survivorship annuities paid from those systems.3West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
The public safety carve-out is narrower than it sounds. A retired state trooper’s pension is fully excluded. A retired state clerical worker’s PERS pension is not, even though both come from state service. The exclusion attaches to the specific retirement system, not to the fact of state employment.
Pensions With a Limited $2,000 Deduction
Three pension sources qualify for a capped subtraction of $2,000 per person per year:
- West Virginia Public Employees Retirement System (PERS)
- West Virginia State Teachers Retirement System (TRS)
- Federal government retirement systems
The deduction applies at any age and covers survivorship annuities from these systems.4West Virginia State Tax Department. West Virginia Tax Tips for Senior Citizens TSD-413 The cap is per person, not per system. If you draw both a PERS pension and a federal pension, your combined subtraction here is still $2,000.2West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
This $2,000 deduction is separate from the senior citizen deduction described below. A 66-year-old retired teacher can claim the $2,000 TRS subtraction and still use the $8,000 senior citizen deduction against other income.
Private Pensions, 401(k)s, and Traditional IRAs
Private employer pensions, 401(k) distributions, and traditional IRA withdrawals get no dedicated exclusion. They stay in your West Virginia taxable income unless you qualify for the senior citizen deduction.
If you are 65 or older at any point during the tax year, or you are permanently and totally disabled, you can subtract up to $8,000 from your federal AGI. It applies to income from any source, not only retirement accounts. Married couples where both spouses qualify get $16,000 combined.4West Virginia State Tax Department. West Virginia Tax Tips for Senior Citizens TSD-413
The $8,000 cap covers income you haven’t already excluded elsewhere. Amounts subtracted through the $2,000 government pension deduction, the military exclusion, or the public safety exclusion cannot be counted toward the $8,000 again. The senior deduction picks up where the more specific rules leave off. Private pensions, 401(k) withdrawals, traditional IRA distributions, part-time wages, and investment income all count.
An example. A 67-year-old retiree receives $15,000 from PERS and $10,000 from a private 401(k). The $2,000 PERS deduction comes off first, then the $8,000 senior citizen deduction applies to the remainder. Total subtractions: $10,000. West Virginia taxable pension income: $15,000.
Under 65 but disabled? The senior citizen deduction is still available if you are permanently and totally disabled, using a standard similar to the Social Security Administration’s: a condition preventing substantial work that has lasted or is expected to last at least 12 consecutive months.
A Note on Social Security
Social Security is not a pension, but people asking about pension tax usually want to know about it too. Starting in tax year 2026, Social Security benefits are fully exempt from West Virginia income tax for every filer, with no income threshold.5West Virginia Tax Division. Social Security Modification That exemption sits alongside all the pension rules above and does not eat into the $8,000 senior deduction.
Roth Accounts
Qualified Roth IRA and Roth 401(k) distributions are not part of federal AGI in the first place, so they never enter the West Virginia calculation. No modification is needed and no deduction is used up. The federal rules for qualification apply (generally, the account open at least five years and the account holder 59½ or older).
Rates on What’s Left
After all subtractions, remaining income is taxed at graduated rates. For tax year 2025:6West Virginia Tax Division. About the Income Tax Rate Cut
- Up to $10,000: 2.22%
- $10,001 to $25,000: $222 plus 2.96% of the amount over $10,000
- $25,001 to $40,000: $666 plus 3.33% of the amount over $25,000
- $40,001 to $60,000: $1,165.50 plus 4.44% of the amount over $40,000
- Over $60,000: $2,053.50 plus 4.82% of the amount over $60,000
The same brackets apply to joint and single filers; married filing separately uses halved thresholds. A retiree with $30,000 in West Virginia taxable income after deductions owes roughly $832 in state tax. Many retirees whose income is mostly Social Security plus a modest pension owe considerably less than that, and some owe nothing at all.
How to Claim These Subtractions
Every exclusion and deduction above is claimed on Schedule M, “Modifications to Adjusted Gross Income,” filed with Form IT-140.7West Virginia State Tax Department. Personal Income Tax Forms and Instructions 2025 The public safety exclusion, military exclusion, and $2,000 government pension deduction each have their own line. The senior citizen deduction is broken across several lines by income type, with the combined total capped at $8,000 per qualifying person. Schedule M’s total flows into IT-140 and reduces federal AGI to West Virginia taxable income.8West Virginia State Tax Department. Schedule M – Modifications to Adjusted Gross Income 2025
Withholding and Estimated Payments
If your pension comes from a West Virginia state retirement system, the Consolidated Public Retirement Board can withhold state tax from each payment. You choose on the withholding form: let CPRB calculate based on your filing status, set a flat dollar amount per payment, or opt out.9West Virginia Consolidated Public Retirement Board. West Virginia State Tax Withholding Exemption Certificate for Pension and Annuity Payments
Private pensions, IRA custodians, and investment accounts usually do not withhold West Virginia tax. If those make up a significant share of your income, quarterly estimated payments may be needed. The state generally follows the federal safe harbor: payments covering at least 90% of the current year’s tax or 100% of the prior year’s tax avoid an underpayment penalty.
Default withholding formulas do not know about your senior citizen deduction or your Social Security exemption. A retiree who qualifies for both may see far more withheld than they actually owe. Reviewing withholding elections each year against your real deductions keeps that money in your account instead of tied up until refund time.