Is military retirement taxed in West Virginia?

How it works in West Virginia

Put the taxable military retirement shown on your federal return on Schedule M, line 32, in Column A for yourself or Column B for your spouse. The 2025 instructions require the 1099-R with the return even when it shows no withholding, and they tell you not to repeat the amount on line 33b, the federal retirement line capped at $2,000.

Line 49 adds each column's subtractions and line 50 totals both columns for Form IT-140, line 3. No age test, income test or years-of-service rule applies to line 32.

On an assumed $36,000 pension, line 32 is worth $1,649 a year at the 2026 top rate of 4.58% to a filer whose taxable income tops $60,000 even without the pension. That bracket applies to every filing status except married filing separately, which reaches 4.58% over $30,000. At the 2025 top rate of 4.82% the same pension saved $1,735.

Then check the senior deduction on line 47. A filer who is 65 or older, or certified as permanently and totally disabled, may subtract up to $8,000 of other income, but box (d) adds lines 29 through 34, which include the military pension, and subtracts that total from box (c). A pension of $8,000 or more leaves that person no senior deduction; a spouse without a pension still figures a separate one.

The surviving spouse deduction on line 48 has the same kind of limit. The 2025 instructions describe it as a one-time subtraction of up to $8,000 for the year after the death of a spouse who was 65 or older or certified disabled, open only when the deductions on lines 29 through 34, together with the senior deduction line, total less than $8,000, so a survivor whose own SBP annuity on line 32 is $8,000 or more will not get it.

What trips West Virginia retirees up

• The start year is 2018, not 2019. Section 11-21-12(c)(7)(C) covers the regular Armed Forces, Reserves and National Guard for taxable years beginning after December 31, 2017; the 2019 date belongs only to the later sentence that adds the Public Health Service, NOAA and the other uniformed services. The Tax Division's TSD 443 (Rev. April 2024) dates the whole exemption to 2019; the statute's first sentence is the earlier rule.
• The 2025 line 32 instructions mention only the regular Armed Forces, Reserves and National Guard. PHS and NOAA retirees depend on the statute's second sentence, in force since tax year 2019, so keep a copy of § 11-21-12(c)(7)(C) with the return.
• A civil service pension after a military career is capped. Federal retirement goes on line 33b and, together with West Virginia teachers' or public employees' retirement on line 33a, may not exceed $2,000, so a Coast Guard civilian's FERS annuity is mostly taxable while a Coast Guard officer's retired pay is not.
• The pension counted for the Social Security test through 2025. For 2025, Social Security is fully subtracted on line 34 only when federal AGI is $50,000 or less single or $100,000 or less joint; above that, 65% is subtracted, and military retired pay is part of federal AGI, so it can push a couple past the $100,000 line. Section 11-21-12(c)(8)(E) subtracts 100% of Social Security from tax year 2026 at any income, so the test no longer matters on 2026 returns.