2023 Income Tax Rate Cut and Property Tax Rebate

On March 7, 2023, Governor Jim Justice signed HB 2526 immediately reducing the income tax in tax year 2023 by an average of 21.25%. The bill also provides for a number of refundable tax credits for payment of property taxes. The following information is initial guidance on the income tax rate cut. More guidance will follow as it becomes available.

Individuals

Individuals are now subject to lower tax rates on their income beginning in the 2023 tax year. These rate changes do not affect your 2022 personal income tax return filed in 2023. These rates will be on your 2023 personal income tax return filed in early 2024.

The following tables represent the tax rates now applicable to income in the 2023 tax year.

For individuals (except married individuals filing separate returns), individuals filing joint returns, heads of households, and estates and trusts, the following rates apply:

• If the WV Taxable Income is:
• The tax is:

• Not over $10,000
• 2.36% of taxable income

• Over $10,000 but not over $25,000
• $236 plus 3.15% of the excess over $10,000

• Over $25,000 but not over $40,000
• $708.50 plus 3.54% of excess over $25,000

• Over $40,000 but not over $60,000
• $1,239.50 plus 4.72% of excess over $40,000

• Over $60,000
• $2,183.50 plus 5.12% of excess over $60,000

For married individuals filing separate returns:

• If the WV Taxable Income is:
• The tax is:

• Not over $5,000
• 2.36% of taxable income

• Over $5,000 but not over $12,500
• $118 plus 3.15% of excess over $5,000

• Over $12,500 but not over $20,000
• $354.25 plus 3.54% of excess over $12,500

• Over $20,000 but not over $30,000
• $619.75 plus 4.72% of excess over $20,000

• Over $30,000
• $1,091.75 plus 5.12% of excess over $30,000

These rates were changed retroactively to January 1, 2023. Therefore, if you over withheld income tax or overpaid your taxes prior to the rate change, a refund will be available to all taxpayers upon the filing of your 2023 personal income tax return in 2024.

Employers

As indicated above, the income of individuals is now subject to new tax rates.

The withholding tax tables have been updated for the 2023 tax year. The traditional two-earner table has been adjusted to account for the retroactive nature of the tax reduction: The optional single earner table has not.

• IT-104 Employee’s Withholding/Exemption Certificate

• IT-100.1.A Employer's Withholding Notice

• IT-100.2.A Percentage Method of Withholding

• IT-100.2.B Table Method of Withholding

Tax Credits for Property Taxes Paid

• TSD 454 Motor Vehicle Property Tax Adjustment Credit

Beginning January 1, 2024, taxpayers are eligible to claim a Motor Vehicle Property Tax Adjustment Credit. The first opportunity to claim this credit will be on a 2024 WV income tax return, filed in 2025, for all timely paid property taxes for eligible vehicles due in 2024.

The first motor vehicle property tax payment that will be eligible to qualify for the credit is the payment made for the second half of the 2023 property tax year and it must be paid before April 1, 2024. With the passage of HB 125 in the 1st Special Session, taxpayers will not be penalized if they​ pay the second half of their ticket in 2023 because it is still considered due in 2024 and therefore timely paid.

Who Qualifies? Individuals, Partnerships, S-Corporations, LLCs, and C-Corporations who own a qualifying vehicle.

Leasing companies also qualify for the credit. They are required to pass the savings on to the consumer leasing the motor vehicle. Contact your leasing company for more information on when you can expect to see the discount.

Who Does Not Qualify? Motor Vehicle Dealers.

What Vehicles Qualify? Class A, B, G, H, T, V, X and All-Terrain Vehicles pursuant to W. Va. Code § 20-15-2. Visit transportation.wv.gov for more information on these classes of vehicles.

• To ensure that you qualify for the Motor Vehicle Property Tax Adjustment Credit, you will have to:
• File your personal property tax returns with your County Assessor timely. For businesses that means before September 1 and for individuals before October 1.
• Pay your personal property taxes timely. That means the first half of the assessment must be paid before October 1 and the second half before April 1.

Location and contact information for your County Assessor can be found here.

Only individuals and business motor vehicle owners may qualify for the Motor Vehicle Property Tax Adjustment Credit. The credit is only available for the actual tax paid. If an early payment discount is applied, the credit is limited to the amount actually paid after deduction of the discount.

Taxpayers that do not owe WV income taxes and are not required to file a WV income tax return will be able to file a claim for a rebate in early 2025 of their Motor Vehicle property taxes paid. Continue to check this website for more information and form requirements as they become available.

Other credits available in 2024 for taxes filed in 2025 are for residential property of disabled veterans and on all personal property taxes paid by small businesses.

More information on these credits will be made available soon.