West Virginia does tax pensions as a general rule, because the state starts its calculation from your federal adjusted gross income and pension payments are part of that figure. From there, though, the state allows a series of subtractions that fully exempt some pensions, partially exempt others, and give anyone 65 or older an additional $8,000 deduction against any kind of income. Many retirees end up owing little or nothing once those modifications are applied.1West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
Pensions That Are Fully Exempt
Two categories of pension income escape West Virginia income tax entirely.
Military retirement pay is fully excluded, with no income cap and no age requirement. The exclusion covers retirement from every branch of the uniformed services, including the 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 are also fully excluded.2West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
West Virginia public safety pensions are also fully exempt. That covers 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. Survivorship annuities from these systems qualify as well.3West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
Note the distinction: a retired state trooper’s pension is fully excluded, but a retired state office worker’s pension from the general Public Employees Retirement System is not. The next section explains that treatment.
PERS, Teachers Retirement, and Federal Pensions
Pensions from the West Virginia Public Employees Retirement System (PERS), the West Virginia State Teachers Retirement System (TRS), and federal government retirement systems qualify for a deduction of up to $2,000 per person per year. The deduction applies regardless of age and covers survivorship annuities from these systems.4West Virginia State Tax Department. West Virginia Tax Tips for Senior Citizens TSD-413
The $2,000 cap is per person, not per system. If you draw both a PERS pension and a federal pension, your combined deduction under this provision still tops out at $2,000.2West Virginia Legislature. West Virginia Code 11-21-12 – West Virginia Adjusted Gross Income of Resident Individual
The rest of the pension is taxable, but if you’re 65 or older the senior citizen deduction described below picks up where this one leaves off.
Private Pensions, 401(k)s, and IRAs
Private employer pensions, 401(k) distributions, and traditional IRA withdrawals get no dedicated exclusion. They flow through from your federal AGI into West Virginia taxable income.
What saves most retirees here is the senior citizen deduction. If you were 65 or older at any point during the tax year, or you are permanently and totally disabled, you can deduct up to $8,000 of income from any source. For a married couple filing jointly where both spouses qualify, the combined deduction doubles to $16,000.4West Virginia State Tax Department. West Virginia Tax Tips for Senior Citizens TSD-413
The $8,000 limit covers all qualifying income not already removed through another modification. You can’t double-count income you’ve already subtracted using the $2,000 government pension deduction, the military exclusion, or the public safety pension exclusion. Private pensions, 401(k) and traditional IRA withdrawals, and even non-retirement income like part-time wages or investment earnings all count toward the $8,000.
The disability route is open to retirees under 65 if a condition prevents substantial work activity and has lasted or is expected to last at least 12 consecutive months.
Social Security
Social Security isn’t a pension, but it often sits alongside one in a retiree’s income. Starting in tax year 2026, Social Security benefits are fully exempt from West Virginia income tax for all filers, regardless of income. That removes any Social Security figure from your state tax base before the pension rules even come into play.5West Virginia Tax Division. Social Security Modification
How It Adds Up
Take a 67-year-old receiving $15,000 from PERS and $10,000 from a private 401(k). The $2,000 PERS deduction comes off first. The senior citizen deduction then removes another $8,000 from the remaining income. That’s $10,000 subtracted in total, leaving $15,000 subject to West Virginia income tax. Any Social Security income sits outside the calculation entirely.
A retiree whose income is mostly Social Security plus a modest pension can often zero out their state tax liability. Larger private pensions and 401(k) draws will leave a meaningful balance after the $8,000 deduction, but the effective rate is still held down by West Virginia’s bracket structure.
Tax Rates on What’s Left
Pension income remaining after all deductions is taxed at West Virginia’s graduated rates. For tax year 2025, the rates are: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
Joint filers and single filers use the same brackets. Married filing separately uses halved thresholds. For a retiree with $30,000 in West Virginia taxable income after all deductions, the state tax bill works out to roughly $832.
Claiming the Exclusions on Your Return
Every pension exclusion and deduction is claimed through Schedule M, “Modifications to Adjusted Gross Income,” filed with the West Virginia Personal Income Tax Return (Form IT-140).7West Virginia State Tax Department. Personal Income Tax Forms and Instructions 2025 On the 2025 Schedule M:
- Line 31: Full exclusion for West Virginia police, deputy sheriff, and firefighter retirement income
- Line 32: Full exclusion for military retirement income
- Line 33: The $2,000 deduction for PERS, TRS, and federal retirement income
- Lines 35–47: The senior citizen deduction, broken into subcategories, with the total not to exceed $8,000 per qualifying person
The total of your decreasing modifications carries over to Form IT-140 and reduces your federal AGI down to West Virginia taxable income.8West Virginia State Tax Department. Schedule M – Modifications to Adjusted Gross Income 2025
Withholding From Your Pension
If your pension comes from a West Virginia state retirement system, the Consolidated Public Retirement Board (CPRB) can withhold state income tax directly from your payments. You pick one of three options on the state withholding form: let CPRB calculate the amount based on your filing status, specify a fixed dollar amount per payment, or opt out of state withholding entirely.9West Virginia Consolidated Public Retirement Board. West Virginia State Tax Withholding Exemption Certificate for Pension and Annuity Payments
Retirees who opt out, or who draw from private pensions and IRAs that don’t withhold West Virginia tax, should consider quarterly estimated tax payments. West Virginia generally follows the federal safe harbor: if your withholding and estimated payments cover at least 90% of your current-year tax or 100% of your prior-year tax, you avoid an underpayment penalty.
Default withholding on a pension payment doesn’t know about your senior citizen deduction or any full exclusions you qualify for. If you don’t review your elections, you can easily have far more withheld than you’ll actually owe. Checking the withholding figure against a rough calculation of your deductions each year is the simplest way to stop overpaying throughout the year.