Updated October 5, 2026. Quick answer: Yes, with a small modification. West Virginia’s instructions say the modification for pensions and annuities from the Public Employees’ Retirement System, Teachers’ Retirement System and federal retirement “is limited to a maximum of $2,000 and entered on Schedule M”. For 2025 the rates run from 2.22% to 4.82%.
State retirement-income forms, line by line: West Virginia Schedule M.
How West Virginia treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Taxed; a $2,000 modification for certain public systems |
| 2025 rates | 2.22% on the first $10,000, then “$222.00 plus 2.96% of excess over $10,000”, up to 4.82% |
| Where it starts | The booklet says to enter “total taxable amount of pensions and annuities reported on your federal return” |
| Not taxed | Retirement from state or local police, deputy sheriffs’ or firemen’s systems, federal law enforcement and military retirement, including survivorship annuities |
| Age 65 or disabled | Filers may reduce income by up to $8,000 through Schedule M; the documents do not say which income types it covers |
| Nonresidents | “income received by a nonresident is NOT subject to West Virginia tax” |
A $24,000 example
If $24,000 of annuity payments were a filer’s whole taxable income for 2025, the tax is $636.40, computed as $222.00 + 2.96% x ($24,000 minus $10,000), before the $2,000 modification and any other adjustment.
What changes in 2026
SB 392, signed March 31, 2026, cuts income tax rates 5% retroactive to January 1, 2026; the Tax Department prints 2026 rates of 2.11%, 2.81%, 3.16%, 4.22% and 4.58%.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether West Virginia taxes pensions, how West Virginia taxes retirement income, state tax on 401(k) and IRA withdrawals, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- 2025 Personal Income Tax Information and Instructions, IT-140 (West Virginia State Tax Department): https://tax.wv.gov/Documents/PIT/2025/it140.PersonalIncomeTaxFormsAndInstructions.2025.pdf
- 2025 Tax Rate Schedules (West Virginia State Tax Department): https://tax.wv.gov/Documents/PIT/2025/it140.TaxRateSchedules.2025.pdf
- 2026 Income Tax Rate Cut (West Virginia State Tax Department): https://tax.wv.gov/Individuals/Pages/PersonalIncomeTaxReductionBill.aspx
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.