West Virginia is considering giving a tax credit of up to $25,000 to former residents to move back to the state. The bill that would send tax credits from West Virginia to former residents was unanimously approved by the Senate earlier this week.
Tax Credits From West Virginia: What Is It?
On Monday, the Senate approved the bill (Senate Bill 438 – Return to West Virginia Tax Credit Act) that would give tax credits to entice people who once lived in the state and moved away, to come back. The bill has now been sent to the House of Delegates for approval.
To qualify for these tax credits from West Virginia, individuals need to have lived and worked in West Virginia for a minimum of 10 years, or they must have been born in the state. Also, they had to have lived outside the state for a minimum of 10 consecutive years before 2023.
In case the tax credit isn’t used in a tax year, it will be applied in future years. Also, the credit won’t be retroactively applied to a previous tax year. If approved, this tax credit would expire in 2029.
These tax credits from West Virginia seem to be a good move to entice ex-residents to move back and contribute to the growth of the state. Although such a credit is needed, the bill still needs to gather enough support to become law.
Moreover, these tax credits are not the first effort from West Virginia lawmakers to boost the state’s dropping population. The Department of Tourism, for instance, is giving $12,000 cash plus free passes to remote workers to encourage them to move to certain areas of the state.
Is There A Need For Such Tax Credits?
West Virginia witnessed a higher percentage drop (3.2%) of its residents than any other state from 2010 to 2020. It is the only state with fewer residents than it had in 1950. The drop in the population is partially attributable to the decline in coal, steel and other industries in the state.
West Virginia is the fourth-most impoverished state, with over 17% of residents below the poverty line. Moreover, the average per-capita income of the state was below $29,000 in 2021, according to the Census data.
“West Virginia is enjoying low unemployment rates and seeks the return of West Virginians who have been gone because they, or their family members, felt the need to pursue employment opportunities outside of the state,” reads the purpose of the bill.
In separate news, West Virginia Governor Jim Justice, in a Facebook post on Saturday, said that they were able to crack a deal with the House and Senate to come up with the “largest tax cut in West Virginia history.”
“This deal returns over $750 million to hardworking West Virginians through a major cut to our personal income tax, rebate of the car tax, a 50% rebate of the property tax on machinery and inventory to small businesses, and tax credits to West Virginia Veterans,” the post read.