- Governor Patrick Morrisey signed a 5% income tax cut into law on March 31, 2026.
- The tax reduction will cost approximately $125 million funded through existing state budget surpluses.
- Analysis shows uneven savings across income groups, with top earners gaining significantly more than low-income households.
(WEST VIRGINIA) — Gov. Patrick Morrisey signed a bill into law on Tuesday, March 31, 2026, cutting West Virginia’s personal income tax by 5 percent under Senate Bill 392 after lawmakers scaled back his original push for a deeper reduction.
The measure, enacted on March 31, 2026, marks the latest step in the state’s broader tax-cutting drive and locks in what Morrisey had proposed as part of his budget. The House of Delegates passed an amended version of Senate Bill 392 that included the 5% state income tax cut and sent it to the governor for his signature.
Morrisey had originally proposed a 10% cut in his State of the State Address and budget. After negotiations with the Legislature, lawmakers enacted only the first half of that proposal.
The law adds to a tax policy shift that began in 2023, when West Virginia approved House Bill 2526. That measure cut income taxes by more than 20% and set automatic triggers for future reductions when state revenue exceeds 2019 levels.
This year’s action took a different route. Del. Sean Hornbuckle, D-Cabell, said the 2026 reduction bypassed the automatic trigger mechanism created under the 2023 law.
State Budget Director Mike McKown estimated the cost of the new tax cut at about $125 million. The state plans to pay for it by reallocating surplus funds from the current budget year.
Morrisey also signed another bill on the same day. Together, the two measures deliver over $230 million in tax cuts.
That made March 31 a notable day for the governor’s fiscal agenda. It also tied Morrisey more closely to a continuing effort by state leaders to reduce personal income taxes in stages rather than through a single, larger package.
Senate Bill 392 moved through the Legislature after the House adopted an amended version that included the 5% reduction from Morrisey’s budget proposal. By the time the bill reached his desk, the central tax provision had been narrowed from the governor’s original target but preserved as an immediate cut.
The gap between the governor’s opening bid and the final law showed the limits of what lawmakers were prepared to approve this year. Morrisey had vowed to negotiate the additional 5%, but that portion did not make it into the enacted measure.
The 5% state income tax cut is smaller than the reduction Morrisey first outlined, yet it still carries a substantial cost for the state budget. McKown’s estimate of about $125 million places the measure among the more expensive tax actions taken during this year’s session.
Funding the law through surplus dollars from the current budget year also ties the cut directly to West Virginia’s recent revenue position. Rather than waiting for the revenue-trigger system established in 2023 to activate, lawmakers approved a separate legislative path and paired it with a funding source already available in the state’s books.
That distinction matters in West Virginia because House Bill 2526 was designed to govern future tax relief through an automatic formula. Under that 2023 law, further reductions would occur when state revenue exceeds 2019 levels.
Hornbuckle said this year’s bill did not follow that formula. Instead, Senate Bill 392 delivered a legislated reduction outside the trigger structure.
The move builds on a political and fiscal trend that has reshaped West Virginia’s tax debate in the past three years. House Bill 2526 lowered income taxes by more than 20%, and the state has now added another 5% cut through a separate law signed by Morrisey on March 31, 2026.
For taxpayers, the benefits will not fall evenly across income groups. Sean O’Leary, senior policy analyst at the West Virginia Center on Budget and Policy, said top-earning households could save $2,300 annually, while the poorest might see $4.
Those figures highlight the uneven way broad income tax reductions can affect households. A higher-income filer with a larger tax liability stands to receive a much bigger dollar benefit than a lower-income filer whose state income tax bill is already modest.
The difference is not only mathematical. It also frames the debate over who gains most from statewide tax reductions and how lawmakers weigh that against the broader goal of lowering taxes across the board.
Supporters of tax cuts in West Virginia have pointed to the state’s earlier efforts as proof that lawmakers can continue reducing personal income taxes while managing the budget. Senate Bill 392 extends that policy direction, even as it stops short of the full 10% reduction Morrisey sought at the outset.
The governor’s budget proposal set the terms for this year’s discussion. By including a 5% reduction in the final House-amended bill, lawmakers endorsed part of Morrisey’s tax plan while leaving the rest for another day.
That legislative compromise allowed Morrisey to secure a tax cut and sign it into law before the end of March. It also preserved room for future debate over whether the remaining 5% he initially proposed could return in a later session.
March 31, 2026, now stands as the date attached to both the enactment of Senate Bill 392 and the signing of another tax bill that pushed the day’s total beyond $230 million. Taken together, the measures deepened the state’s commitment to tax relief and added to the cumulative effect of changes that began in 2023.
The structure of this year’s action also sets it apart from the earlier framework. House Bill 2526 tied future reductions to revenue benchmarks, but Senate Bill 392 advanced through the normal legislative process and became law because the House of Delegates passed an amended version that included the 5% cut.
For Morrisey, that outcome delivered a policy win tied directly to his first budget as governor. The signed bill gives him a tangible result on taxes, even though the enacted measure reflects negotiation with lawmakers rather than full adoption of his opening proposal.
For the Legislature, the measure offered a middle course. Lawmakers approved a cut large enough to advance Morrisey’s agenda, but smaller than the 10% reduction he presented in his State of the State Address.
For the state budget, the immediate effect is the $125 million cost McKown projected, covered through reallocated surplus funds. For residents, the practical effect will depend on income level, with O’Leary’s estimates showing a wide spread between households at the top and bottom of the income scale.
That contrast is likely to remain part of the conversation around the 5% state income tax cut as West Virginia weighs future reductions. A policy that lowers rates for everyone can still produce sharply different dollar results.
Senate Bill 392 now becomes part of a larger timeline in which West Virginia first cut income taxes by more than 20% in 2023, created revenue triggers for more relief, and then moved outside that system in 2026 to approve another reduction directly. The new law does not erase the earlier trigger mechanism, but it shows lawmakers are willing to act apart from it.
The sequence also reflects how tax policy often develops in stages. Morrisey sought a 10% reduction, lawmakers enacted 5%, and the final law preserved the governor’s push for lower income taxes while trimming its scope to fit what the Legislature would support.
That leaves West Virginia with a fresh round of tax relief, a budget cost of about $125 million, and a combined tax-cut package for March 31 that exceeds $230 million. It also leaves a clear split in who benefits most, with top-earning households projected to save $2,300 annually and the poorest projected to save $4 under the income tax measure Morrisey signed Tuesday.
