Updated October 29, 2026. Quick answer: Partly, up to a cap. The 2025 IT-140 instructions give a federal retirement subtraction: “Regardless of age, enter the taxable amount of retirement” income on Schedule M line 33b. “Combined amounts of 33a and 33b must not exceed $2,000.”
What West Virginia does with a FERS or CSRS annuity
| Question | What the West Virginia documents say |
|---|---|
| What the source says | West Virginia lets a retiree subtract federal retirement system income (benefits under systems covered by Title 4 USC 111, which the instructions label Federal Retirement) regardless of age, but only up to a $2,000 cap per person. |
| Amount or limit | Subtract the taxable federal retirement income reported on the federal return, not more than $2,000 per person; the cap is shared with West Virginia Teachers and Public Employees retirement subtractions, so lines 33a and 33b combined cannot exceed $2,000 (Schedule M line 33b). Federal law enforcement and military retirement are separate lines with no stated cap. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the West Virginia documents’ own words
- “FEDERAL RETIREMENT. Regardless of age, enter the taxable amount of retirement” (2025 Personal Income Tax Information and Instructions (IT-140))
- “and Federal Retirement is limited to a maximum of $2,000” (2025 Personal Income Tax Information and Instructions (IT-140))
- “$2,000 of benefits received under any federal retirement system” (W. Va. Code 11-21-12 West Virginia adjusted gross income of resident individual)
- “the total modification under this paragraph shall not exceed $2,000 per person” (W. Va. Code 11-21-12 West Virginia adjusted gross income of resident individual)
- “in the amount of $8,000 received from any source” (W. Va. Code 11-21-12 West Virginia adjusted gross income of resident individual)
How this differs from other pensions in West Virginia
Federal retirement gets the same $2,000 cap as West Virginia Teachers and Public Employees retirement, while retirement income from West Virginia state or local police, deputy sheriff and firefighter systems, federal law enforcement retirement and military retirement is not taxed at all. Separately, a person who is 65 or older or certified disabled may subtract up to $8,000 of income from any source, reduced by the other retirement modifications taken. See also Does West Virginia tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the West Virginia return
The subtraction is claimed on Schedule M line 33b of the IT-140, and W. Va. Code 11-21-12 sets the per person cap that the instructions repeat.
Checks before you rely on this answer
- Add lines 33a and 33b before filing, because they share one $2,000 limit.
- Use the taxable amount reported on your federal return, since the instructions ask for the taxable amount of retirement income.
- If you are 65 or older or disabled, work out whether the general $8,000 modification gives more, remembering it is reduced by the other retirement modifications taken.
What the West Virginia documents leave open
The rate schedule is a PDF table and is not published here. The instructions do not say how private pensions are treated beyond the general $8,000 modification for filers 65 or older or disabled, which covers income from any source. No 2026 booklet exists yet.
Common mistakes
- Taking the cap twice. Lines 33a and 33b share one $2,000 limit per person.
- Assuming the $8,000 modification for age 65 or older stacks fully on top. It covers income from any source and is reduced by the other retirement modifications taken.
Related: Does West Virginia tax pensions?, West Virginia military retirement pay, West Virginia retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- 2025 Personal Income Tax Information and Instructions (IT-140): https://tax.wv.gov/Documents/PIT/2025/it140.PersonalIncomeTaxFormsAndInstructions.2025.pdf
- W. Va. Code 11-21-12 West Virginia adjusted gross income of resident individual: https://code.wvlegislature.gov/11-21-12/
Read from the state documents linked above on October 29, 2026. General information, not tax advice.