WFTC increase/tenants

AN ACT Relating to increasing the working families' tax credit to 1
reflect the economic impact of property taxes incorporated into 2
rental amounts charged to residential tenants; amending RCW 3
82.08.0206; and creating new sections. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 82.08.0206 and 2024 c 3 s 1 are each amended to read 6
as follows: 7
(1) A working families' tax credit, funded by sales and use tax 8
imposed, is provided to eligible low-income persons for calendar 9
years beginning on or after January 1, 2022. The credit is refundable 10
and is calculated as provided in this section. 11
(2) For purposes of the credit in this section, the following 12
definitions apply: 13
(a)(i) "Eligible low-income person" means an individual who:14
(A) Is eligible for the credit provided in Title 26 U.S.C. Sec. 15
32 of the internal revenue code; 16
(B) Properly files a federal income tax return for the prior 17
federal tax year, and was a Washington resident during the year for 18
which the credit is claimed; and 19
(C) Has paid either retail sales tax under this chapter or use 20
tax under chapter 82.12 RCW, or both. There is a rebuttable 21
H-1626.1
HOUSE BILL 2025
State of Washington 69th Legislature 2025 Regular Session
By Representatives Berg, Ramel, Taylor, Ryu, Nance, Rule, Fosse,
Salahuddin, Parshley, Hill, Thomas, and Cortes
Read first time 02/25/25. Referred to Committee on Finance.
p. 1 HB 2025
presumption that a person paid either retail sales tax under this 1
chapter or use tax under chapter 82.12 RCW, or both, if they were a 2
Washington resident during the year for which the credit is claimed.3
(ii) "Eligible low-income person" also means an individual who 4
meets the requirements provided in (a)(i)(B) of this subsection and 5
would otherwise qualify for the credit provided in Title 26 U.S.C. 6
Sec. 32 of the internal revenue code except that one or any 7
combination of the following conditions apply: 8
(A) The individual filed a federal income tax return for the 9
prior federal tax year using a valid individual taxpayer 10
identification number in lieu of a social security number, and the 11
individual's spouse, if any, and all qualifying children, if any, 12
have a valid individual taxpayer identification number or a social 13
security number; or 14
(B) The individual filed their federal income tax return for the 15
prior federal tax year under the married filing separately status. 16
For purposes of the refund provided in this section, the special rule 17
for separated spouse under Title 26 U.S.C. Sec. 32 (d)(2)(B) of the 18
internal revenue code does not apply. 19
(b) "Income" means earned income as defined by Title 26 U.S.C. 20
Sec. 32 of the internal revenue code. 21
(c) "Individual" means an individual or an individual and that 22
individual's spouse if they file a federal joint income tax return.23
(d) "Internal revenue code" means the United States internal 24
revenue code of 1986, as amended, as of June 9, 2022, or such 25
subsequent date as the department may provide by rule consistent with 26
the purpose of this section. 27
(e) "Maximum qualifying income" means the maximum federally 28
adjusted gross income for the prior federal tax year.29
(f) "Qualifying child" means a qualifying child as defined by 30
Title 26 U.S.C. Sec. 32 of the internal revenue code, except the 31
child may have a valid individual taxpayer identification number in 32
lieu of a social security number. 33
(g) "Washington resident" means an individual who is physically 34
present and residing in this state for at least 183 days. "Washington 35
resident" also includes an individual who is not physically present 36
and residing in this state for at least 183 days but is the spouse of 37
a Washington resident. For purposes of this subsection, "day" means a 38
calendar day or any portion of a calendar day. 39
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(3)(a) Except as otherwise provided in (((b) and (c) of)) this 1
subsection, for calendar year 2023 and thereafter, the working 2
families' tax credit refund amount for the prior calendar year is:3
(i) $300 for eligible persons with no qualifying children;4
(ii) $600 for eligible persons with one qualifying child;5
(iii) $900 for eligible persons with two qualifying children; or6
(iv) $1,200 for eligible persons with three or more qualifying 7
children. 8
(b) Except as provided in (((f))) (g) of this subsection, the 9
refund amounts provided in (a) of this subsection ((will)) must be 10
reduced, rounded to the nearest dollar, as follows:11
(i) For eligible persons with no qualifying children, beginning 12
at $2,500 of income below the federal phase-out income for the prior 13
federal tax year, by 18 percent per additional dollar of income until 14
the minimum credit amount as specified in (c) of this subsection is 15
reached. 16
(ii) For eligible persons with one qualifying child, beginning at 17
$5,000 of income below the federal phase-out income for the prior 18
federal tax year, by 12 percent per additional dollar of income until 19
the minimum credit amount as specified in (c) of this subsection is 20
reached. 21
(iii) For eligible persons with two qualifying children, 22
beginning at $5,000 of income below the federal phase-out income for 23
the prior federal tax year, by 15 percent per additional dollar of 24
income until the minimum credit amount as specified in (c) of this 25
subsection is reached. 26
(iv) For eligible persons with three or more qualifying children, 27
beginning at $5,000 of income below the federal phase-out income for 28
the prior federal tax year, by 18 percent per additional dollar of 29
income until the minimum credit amount as specified in (c) of this 30
subsection is reached. 31
(c) If the refund for an eligible person as calculated in this 32
section is greater than zero cents, but less than $50, the refund 33
amount is $50. 34
(d)(i) In addition to the amounts specified in (a) of this 35
subsection, beginning in calendar year 2026 and thereafter, an 36
additional working families' tax credit refund amount of $300 is 37
provided to an eligible person who leased or rented their primary 38
residence in Washington for at least 183 days during the year for 39
which the credit is claimed. The 183-day period may be met by 40
p. 3 HB 2025
aggregating the leasehold or rental periods for multiple lease or 1
rental agreements if the individual changed location during the 2
calendar year. An individual must be a signatory on any lease or 3
rental agreements used to meet the 183-day requirement under this 4
subsection (3)(d). 5
(ii) To qualify, eligible individuals must meet the requirements 6
for a refund under (a) of this subsection and apply for the 7
additional refund amount in a form and manner specified by the 8
department.9
(iii) The additional refund amounts provided in this subsection 10
(3)(d) must be adjusted for inflation every year beginning January 1, 11
2027, as provided under (e) of this subsection. The adjusted refund 12
amounts must be rounded to the nearest $5.13
(iv) The additional refund amounts provided in this subsection 14
(3)(d) must be reduced, rounded to the nearest dollar, beginning at 15
the income amounts below the federal phase-out income levels 16
specified in (b) of this subsection.17
(v) The percentage rate of remittance reductions in (d)(iv) of 18
this subsection must be adjusted every year beginning January 1, 19
2026, based on calculations by the department that result in the 20
minimum credit being received at the maximum qualifying income level.21
(e) The refund amounts in this section shall be adjusted for 22
inflation every year beginning January 1, 2024, based upon changes in 23
the consumer price index that are published by November 15th of the 24
previous year for the most recent 12-month period. The adjusted 25
refund amounts must be rounded to the nearest $5. 26
(((e))) (f) For purposes of this section, "consumer price index" 27
means, for any 12-month period, the average consumer price index for 28
that 12-month period for the Seattle, Washington area for urban wage 29
earners and clerical workers, all items, compiled by the bureau of 30
labor statistics, United States department of labor.31
(((f))) (g) The percentage rate of remittance reductions in (b) 32
of this subsection must be adjusted every year beginning January 1, 33
2023, based on calculations by the department that result in the 34
minimum credit being received at the maximum qualifying income level.35
(4) The working families' tax credit shall be administered as 36
provided in this subsection. 37
(a) The refund paid under this section will be paid to eligible 38
filers who apply pursuant to this subsection. 39
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(i) Application must be made to the department in a form and 1
manner determined by the department. If the application process is 2
initially done electronically, the department must provide a paper 3
application upon request. The application must include any 4
information and documentation as required by the department. The 5
department may use the information provided by the individual to 6
calculate the refund amount. Income reported on the application may 7
be rounded to the nearest dollar. 8
(ii) An individual applying for the credit under this section 9
must keep records necessary for the department to verify eligibility 10
under this section. Any information provided by the individual is 11
subject to audit verification by the department. 12
(iii) In addition to information provided on the application, the 13
department may verify that an individual qualifies as a Washington 14
resident through the use of automated verification tools or other 15
reasonable means. 16
(iv)(A) Except as provided in (a)(iv)(B) of this subsection (4), 17
application for a refund under this section must be made in the year 18
following the year for which the federal tax return was filed, but in 19
no case may any refund be provided for any period before January 1, 20
2022. 21
(B)(I) A person may apply for any refund for which they were 22
eligible but did not claim under (a)(iv)(A) of this subsection (4) 23
for up to three additional years. A person must complete an 24
application to claim this refund within the three calendar years 25
after the end of the calendar year in which the federal income tax 26
return for that tax year was legally due for federal income tax 27
purposes, without regard to any federal extension.28
(II) If a person seeks to increase the amount of a refund that 29
has been made under this subsection (4), the person must apply for 30
the amended refund within the nonclaims period established under RCW 31
82.32.060(1). 32
(v) A person may not claim a credit on behalf of a deceased 33
individual. No individual may claim a credit under this section for 34
any year in a disallowance period under Title 26 U.S.C. Sec. 32 (k)(1) 35
of the internal revenue code or for any year for which the individual 36
is ineligible to claim the credit in Title 26 U.S.C. Sec. 32 of the 37
internal revenue code by reason of Title 26 U.S.C. Sec. 32 (k)(2) of 38
the internal revenue code. 39
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(vi) In order to qualify for the additional refund amount under 1
subsection (3)(d) of this section, applicants must submit, upon 2
application, a copy of the lease or rental agreement and any other 3
documents specified by the department as necessary to substantiate 4
the eligibility for the additional refund under subsection (3)(d) of 5
this section.6
(b) The department shall protect the privacy and confidentiality 7
of personal data of refund recipients in accordance with chapter 8
82.32 RCW. 9
(c) The department shall, in conjunction with other agencies or 10
organizations, design and implement a public information campaign to 11
inform potentially eligible persons of the existence of, and 12
requirements for, the credit provided in this section.13
(d) The department must work with the internal revenue service of 14
the United States to administer the credit on an automatic basis as 15
soon as practicable. 16
(5) Receipt of a refund under this section may not be used in 17
eligibility determinations for any state income support programs or 18
in making public charge determinations. 19
(6) The department may adopt rules necessary to implement this 20
section. This includes establishing a date by which applications will 21
be accepted, with the aim of accepting applications as soon as 22
possible. 23
(7) The department must review the application and determine 24
eligibility for the working families' tax credit based on information 25
provided by the applicant and through audit and other administrative 26
records, including, when it deems it necessary, verification through 27
information from the internal revenue service of the United States, 28
other federal agencies, Washington state agencies, third-party 29
entities, or other persons. The department may accept a signed 30
attestation in a form and manner determined by the department from an 31
individual to presumptively validate that an individual meets all the 32
eligibility requirements as provided in this section. The signed 33
attestation is subject to audit verification by the department to 34
validate an individual's eligibility for the working families' tax 35
credit. 36
(8) If, upon review of internal revenue service data or other 37
information obtained by the department, it appears that an individual 38
received a refund that the individual was not entitled to, or 39
received a larger refund than the individual was entitled to, the 40
p. 6 HB 2025
department may assess against the individual the overpaid amount. The 1
department may also assess such overpaid amount against the 2
individual's spouse if the refund in question was based on both 3
spouses filing a joint federal income tax return for the year for 4
which the refund was claimed. 5
(a) Interest as provided under RCW 82.32.050 applies to 6
assessments authorized under this subsection (8) starting six months 7
after the date the department issued the assessment until the amount 8
due under this subsection (8) is paid in full to the department. 9
Except as otherwise provided in this subsection, penalties may not be 10
assessed on amounts due under this subsection. 11
(b) If an amount due under this subsection is not paid in full by 12
the date due, or the department issues a warrant for the collection 13
of amounts due under this subsection, the department may assess the 14
applicable penalties under RCW 82.32.090. Penalties under this 15
subsection (8)(b) may not be made due until six months after the 16
department's issuance of the assessment. 17
(c) If the department finds by clear, cogent, and convincing 18
evidence that an individual knowingly submitted, caused to be 19
submitted, or consented to the submission of, a fraudulent claim for 20
refund under this section, the department must assess a penalty of 50 21
percent of the overpaid amount. This penalty is in addition to any 22
other applicable penalties assessed in accordance with (b) of this 23
subsection (8). 24
(9) If, within the period allowed for refunds under RCW 25
82.32.060, the department finds that an individual received a lesser 26
refund than the individual was entitled to, the department must remit 27
the additional amount due under this section to the individual.28
(10) Interest does not apply to refunds provided under this 29
section. 30
(11) Chapter 82.32 RCW applies to the administration of this 31
section. 32
NEW SECTION. Sec. 2. (1) This section is the tax preference 33
performance statement for section 1, chapter . . ., Laws of 2025 34
(section 1 of this act). This performance statement is only intended 35
to be used for subsequent evaluation of the tax preference. It is not 36
intended to create a private right of action by any party or be used 37
to determine eligibility for the preferential tax treatment. 38
p. 7 HB 2025
(2) The tax preference performance statement in section 4, 1
chapter 195, Laws of 2021 applies to the expansion of the tax 2
preference in section 1 of this act. 3
NEW SECTION. Sec. 3. RCW 82.32.805 does not apply to this act.4
NEW SECTION. Sec. 4. Refunds may not be provided under section 5
1 of this act for any period before January 1, 2025.6
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