Working Families Tax Credit applications to open as lawmakers introduce ideas to expand it
One day ahead of when the Working Families Tax Credit is set to open for applications in Washington state, lawmakers held public hearings on three different bills to expand the program.
In 2021, legislators provided funding for the credit, which will affect approximately 400,000 households in the state. The program is for low-to moderate-income families statewide. If eligible, families can receive a cash refund up to $1,200 annually.
Applications for the tax credit open Wednesday, Feb. 1.
On Tuesday, public hearings on bipartisan efforts to expand the credit were held in the House Finance Committee.
House Bill 1000 was introduced by Rep. Drew Stokesbary, R-Auburn, and is supported by six other House Republicans. Under the bill, the $300 refund amount for individuals without children would stay the same as it is in current law, but the legislation would double the refund amount for households in Washington state with children. Additionally, the bill would double the maximum qualifying income.
Stokesbary told the committee that he thinks one of the most important things the Legislature did in the past couple of years was to fund the WFTC, which had not been funded since it was passed in 2008. This bill, he said, would expand the credit.
“If it was not clear that exactly doubling the income limits and exactly doubling the credit limit amounts was a made-up number, I’ll let you in on a secret, it’s a made-up number,” Stokesbary said. “We can do whatever we want. Hopefully we go big and provide working families with as much tax relief as the budget can afford.”
Some others had concerns about the bill.
Traci Underwood, policy director from the Economic Opportunity Institute, said she believes the investments in the WFTC would be worthy, but that there are concerns because the income expansion would only apply to those with children, which Underwood said she believes is inequitable.
The Washington tax code also needs to be reformed to ensure the WFTC, as well as other programs and services, can be fully funded, she added.
Other bills before the legislature also would expand the WFTC.
HB 1075, introduced by Rep. My-Linh Thai, D-Bellevue, would adjust the age requirement for applicants of the WFTC. As the law is currently written, applicants must be at least 25 and under 65, or have a child. Under Thai’s proposal, individuals who are 18 or older, regardless of whether they have a child, would be eligible to apply for the tax credit.
HB 1477, also introduced by Thai, and would expand the WFTC further. Those filing “married filing separately” on their taxes would become eligible to qualify for the credit. Additionally, the legislation would allow retroactive refunds for up to three years for those who qualified but did not apply in previous years.
“This legislation in front of you is a continuation of work between us, the Legislature, the coalitions, the people and the Department of Revenue,” Thai told the committee.
As the tax credit application opens Wednesday, Thai said her legislation addresses some of the pieces of the WFTC that need to be fixed.
All three pieces of proposed legislation would go into effect on Jan. 1, 2024, if passed.
Inslee was scheduled to host a news conference Wednesday afternoon to talk about the launch of the WFTC. Applications for the 2022 tax year are open until Dec. 31, 2023.
To be eligible for the WFTC, applicants must have lived in Washington state for at least six months during 2022. Valid Social Security Numbers or Individual Taxpayer Identification Numbers are also required, and applicants must have filed their 2022 tax returns before applying. Applicants also must be eligible for the federal Earned Income Tax Credit.
