West Virginia law lets contractors receive portable benefit contributions

Hiring parties and others may voluntarily contribute to portable benefit accounts for independent contractors. The contractor must live in West Virginia or perform actual work there. Benefits may include health, income replacement, disability, or life insurance, or retirement benefits. Contributions may come from the hiring party, from the contractor’s pay, or from both. Accounts are administered by an eligible outside provider and assigned to a beneficiary, not a hiring party. The law took effect June 12, 2026.

A hiring party may withhold part of a contractor’s pay for an account only with the contractor’s written, voluntary agreement. This applies when money is withheld from compensation owed to an independent contractor for a portable benefit account. The agreement must be clear and easy to notice in a work contract or separate invoice. The contractor must opt in and may opt out at any time. The law took effect June 12, 2026.

Portable benefit contributions and account activity may not be used to determine whether a contractor is an employee for the listed legal purposes. This concerns the relationship between a hiring party and an independent contractor. The rule applies to state human rights, wage, unemployment, workers’ compensation, and tax matters, employment or third-party lawsuits, and other rights that require an employer-employee relationship. The rule does not prevent a worker from being found to be an employee for those purposes. The law took effect June 12, 2026.

Eligible West Virginia taxpayers may subtract certain portable benefit contributions from state taxable income. The rules cover West Virginia individual taxpayers and corporations contributing to a voluntary portable benefit plan; the recipient subtraction applies to individuals. Individuals may subtract contributions only to the extent they were not allowed as a federal deduction; they may also subtract received contributions to the extent those amounts are included in federal adjusted gross income. Corporations may subtract contributions only to the extent they were not allowed as a federal deduction. These tax rules apply to tax years beginning on or after January 1, 2026.