Updated October 8, 2026. Quick answer: Generally no, if you qualify for the federal exclusion. The 2025 IT-140 computes “Adjusted Gross Income (line 1 plus line 2 minus line 3)” starting from federal adjusted gross income, so a gain excluded under section 121 stays out. Gain above it is taxed at graduated rates reaching 4.58% for 2026 under W. Va. Code 11-21-4j.
West Virginia tax on home sale profit at a glance
| Item | What the documents say |
|---|---|
| Profit on your main home | Starts from federal adjusted gross income plus additions and minus subtractions; the pages read do not mention section 121 |
| Rate on gain above the exclusion | Graduated for 2026: 2.11%, 2.81%, 3.16%, 4.22% and 4.58% over $60,000 (4.82% top rate for 2025) |
| Collected at the sale | Excise tax on the transfer of title of $1.10 for each $500 of value, paid by the grantor unless the grantee accepts the deed without payment, plus a county excise tax of 55 cents for each $500 that a county may raise to $1.65; nonresident sellers: 2.5% of total payments or 4.58% of estimated gain withheld, unless each seller certifies under penalty of perjury that the property is the seller’s principal residence (W. Va. Code 11-21-71b) |
| Source | West Virginia State Tax Department; West Virginia Legislature; West Virginia Tax Division |
What the West Virginia documents say
The 2025 Form IT-140 instructions compute West Virginia “Adjusted Gross Income (line 1 plus line 2 minus line 3)”, where line 1 is federal adjusted gross income. Under the federal statute, “Gross income shall not include gain from the sale or exchange” of a principal residence that meets the ownership and use tests, so an excluded gain never enters federal adjusted gross income. That is reasoning from two documents. The West Virginia pages read never name section 121.
For 2025 the rate schedule runs “2.22% of the taxable income” up to “$60,000 $2,053.50 plus 4.82% of excess over $60,000”. For taxable years beginning on and after January 1, 2026, W. Va. Code 11-21-4j lowers the rates: “Not over $10,000 2.11% of the taxable income”, then 2.81%, 3.16% and 4.22%, and at the top “$1,950.50 plus 4.58% of excess over $60,000”.
What the federal exclusion requires
Most state answers start here. The statute says “Gross income shall not include gain from the sale or exchange” of property that, during the five years before the sale, you owned and used as your principal residence for periods adding up to two years or more. The limit is “shall not exceed $250,000”, or $500,000 for a husband and wife who make a joint return and meet the statute’s conditions. See CMG’s home sale taxes page and exclusion calculator.
A worked example at a $400,000 gain
An illustration, not a return: a married couple in West Virginia sells their main home with a gain of $400,000 and meets the federal ownership and use tests. The gain is below the $500,000 joint exclusion, so it is not in federal adjusted gross income and, on the documents read, $0 is taxed by West Virginia. As a second illustration, computed below, suppose the gain were $600,000. The amount above the exclusion would then be $100,000, which is taxed at the graduated rates; this page computes no tax because the bracket depends on the rest of the return.
What is collected at the sale
West Virginia charges an excise tax on the privilege of transferring title to real estate “at the rate of $1.10 for each $500 value or fraction thereof”, which, under W. Va. Code 11-22-2, “shall be paid by the grantor therein unless the grantee accepts the document without such tax having been paid, in which event such tax shall be paid by the grantee”. The same section adds a county excise tax of “55 cents for each $500 value or fraction thereof”, which a county may increase to “$1.65 for each $500 value”. Counties retain the state tax from July 1, 2025.
Separately, a nonresident seller has income tax withheld on Form WV/NRSR at either “2.5% of total payments, or” “4.58% of estimated capital gain”. The form applies only to nonresident sellers. The withholding statute, W. Va. Code 11-21-71b, says the withholding “does not apply when”, among other cases, “A certification under penalties of perjury that the property being transferred is the transferor’s principal residence is provided by each transferor” in the deed or in an affidavit recorded with it. A nonresident selling the home that is their principal residence can give that certification instead of having tax withheld.
What changes in 2026
West Virginia: W. Va. Code 11-21-4j lowers the rates for taxable years beginning on and after January 1, 2026, to 2.11%, 2.81%, 3.16%, 4.22% and 4.58%, from 2.22%, 2.96%, 3.33%, 4.44% and 4.82% for 2025.
What the documents do not say
- The pages read never name section 121, so conformity is reasoned from the federal starting point. The married filing separately schedule uses half the breakpoints and was not summarized. The county excise tax is read from W. Va. Code 11-22-2 only. The instructions are for tax year 2025; the 2026 rates come from the Code and the March 2026 withholding table.
Common mistakes
- Using the 4.82% top rate printed in the 2025 schedule for a 2026 sale; W. Va. Code 11-21-4j sets 4.58% for 2026.
- Treating the nonresident withholding as a rule for West Virginia residents; the form covers nonresident sellers.
- Assuming a nonresident always has tax withheld; a seller who certifies the property is their principal residence is exempt under W. Va. Code 11-21-71b.
- Assuming the answer for one state applies to another, or that the state answer changes the federal tax on the sale.
Related: home sale taxes, state tax on home sale profit, how West Virginia taxes capital gains, West Virginia retirement taxes, and home sale exclusion calculator.
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Answer againSources
- 2025 West Virginia Personal Income Tax Information and Instructions (IT-140): https://tax.wv.gov/Documents/PIT/2025/it140.PersonalIncomeTaxFormsAndInstructions.2025.pdf
- 2025 Tax Rate Schedules (IT-140): https://tax.wv.gov/Documents/PIT/2025/it140.TaxRateSchedules.2025.pdf
- WV/NRSR Return of Income Tax Withholding for Nonresident Sale of Real Property: https://tax.wv.gov/Documents/Withholding/nrsr.pdf
- West Virginia Code 11-22-2 Rate of tax; when and by whom payable: https://code.wvlegislature.gov/11-22-2/
- W. Va. Code 11-21-4j Rate of tax, taxable years beginning on and after January 1, 2026: https://code.wvlegislature.gov/11-21-4J/
- Tables for Percentage Method of Withholding, Form WV IT-100.2A (March 2026): https://tax.wv.gov/Documents/Withholding/it100.2a.pdf
- West Virginia Code 11-21-71b Withholding tax on West Virginia source income of nonresidents: https://code.wvlegislature.gov/11-21-71B/
- 26 U.S.C. 121, Exclusion of gain from sale of principal residence (U.S. Code, GovInfo): https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapB-partIII-sec121.htm
Sources: the primary documents linked above, read on October 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.