Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › GENERAL RULE: TAX AVOIDANCE › Section 458-20-285 - Working families tax credit

Current through Register Vol. 24-14, July 15, 2024
This rule provides information on the working families tax
				  credit (WFTC). The WFTC is a credit in the form of a refund of retail sales and
				  use tax provided to eligible low-income persons (referred to as "refund" in
				  this rule). Starting February 1, 2023, applicants may apply to the department
				  to receive a refund of sales or use tax paid during the period for which they
				  are claiming the refund. The refund amount is based upon the applicant's income
				  (including the applicant spouse's income, if the applicant is filing married
				  filing jointly on their federal income tax return) and the number of qualifying
				  children the applicant (and the applicant's spouse, if applicable) have.
To qualify for a refund, applicants must meet the eligibility
				  requirements provided in
				  RCW
				  82.08.0206 and complete a WFTC application in
				  the form and manner provided by the department.
This rule is organized into four parts. Each part addresses a
				  question or topic relevant to the application for and administration of the
				  WFTC program as follows:
1. Part 1:
				Eligibility Requirements
2. Part 2:
				Application Process
3. Part 3:
				Refund Amount
4. Part 4: General
				Administration and Review
Examples included in this rule identify a number of facts and
				  then state a general conclusion; they should be used only as a general guide.
				  The tax consequences of all situations must be determined after a review of all
				  the facts and circumstances.
References in this rule to "I," "my," "you," "your," "we," or
				  "our" are intended to refer to the individual applying for the WFTC (i.e., the
				  applicant). For additional information, please visit the department's website
				  at WorkingFamiliesCredit.wa.gov or call the department at 360-763-7300.
Part 1
: Eligibility
				Requirements
(1)
Am I eligible to
				receive a WFTC refund?
To be eligible for a refund under the WFTC, you
				must be an "eligible low-income person." An "eligible low-income person" is an
				"individual" who meets all of the requirements in (a) through (e) of this
				subsection. An "individual" means any natural person who files a federal income
				tax return under the single, head of household, qualifying surviving spouse, or
				married filing separately (although you must be "unmarried" per Answer 1A of
				this rule for tax year 2022) filing statuses. The term "individual"
also
means an individual natural person and that individual's
				spouse if they file a federal joint income tax return with the married filing
				jointly status. Accordingly, if you file a federal income tax return with your
				spouse under the married filing jointly filing status, you and your spouse are
				each considered to be a single "individual" for the purposes of WFTC
				eligibility with the exception of determining residency.
(a)
Valid SSN or ITIN:
You (and
				your spouse if you are filing married filing jointly on your federal income tax
				return) must have a valid Social Security number (SSN) or individual taxpayer
				identification number (ITIN);
(b)
Properly file a federal income tax return:
You (and your spouse if
				you are filing married filing jointly) must properly file a federal income tax
				return for the tax year for which the refund is being claimed;
(c)
EITC eligible:
You must
				generally be eligible for the federal Earned Income Tax Credit (EITC),
				including meeting the federal income thresholds with the following exceptions:
(i) You, your spouse (if you are filing
				married filing jointly on your federal income tax return), and/or your
				qualifying children may have a valid ITIN instead of a SSN, which is not
				permitted under federal EITC eligibility requirements; and
(ii) For tax years 2023 and beyond, if you
				file your federal income tax return under the "married filing separately"
				status, you are no longer required to fulfill the conditions of Internal
				Revenue Code section 32 (d)(2)(B) to qualify for a WFTC refund and you are no
				longer required to provide the additional documentation as described in Answer
				1A of this rule.
(d)
Residency:
The applicant on the WFTC application (which may be
				either you or your spouse, if you are filing married filing jointly on your
				federal income tax return) must be a resident of Washington for at least 183
				days during the tax year for which the refund is being claimed; and
(e)
Sales or use tax paid:
You
				(and/or your spouse if you are filing married filing jointly on your federal
				income tax return) paid Washington sales or use tax on taxable purchases you
				made during the tax year for which the refund is being claimed.
Question 1A: What if I am still married to my spouse,
				  but we are separated, and I file a separate federal income tax return. Am I
				  still eligible for the WFTC?
Answer 1A:
For applicants claiming a WFTC refund
				  for the tax year 2023 and beyond: If you file your federal income tax return
				  under the "married filing separately" status, you are eligible to claim the
				  WFTC refund. You do not need to fulfill the conditions under Internal Revenue
				  Code section 32 (d)(2)(B) to qualify for a WFTC refund or provide additional
				  documentation.
For applicants claiming a WFTC refund for the 2022 tax year:
				  If you are still married to your spouse, but you do not file a federal income
				  tax return under the married filing jointly status and you are considered
				  "unmarried" per Internal Revenue Code section 32(d), then you may still be
				  eligible for the federal EITC, and this in turn would make you an individual
				  eligible for a WFTC refund.
If you are filing "married filing separately" on your federal
				  income tax return, then the department will require you to provide additional
				  information to confirm your "unmarried" status. "Unmarried," as used in
				  Internal Revenue Code section 32(d) requires the following:
(a) You are married, but you did not file a
				federal income tax return under the married filing jointly status.
(b) You lived with your qualifying child for
				more than half of the year. You may demonstrate this by providing:
(i) School records that match your place of
				residence;
(ii) Rental application
				or lease with child/children listed;
(iii) Landlord statement regarding
				child/children;
(iv) Public
				benefits verification letters or statements;
(v) Community-based organization letters of
				recommendation, or vouchers; or
(vi) Any other records that establish that
				your qualifying child lived with you for more than half of the year.
(c) You must be able to show
				either:
(i) You did not have the same
				principal place of abode as your spouse during the last six months of the tax
				year; or
(ii) You have a decree,
				instrument, or agreement (other than a divorce decree) described in IRC 121
				(d)(3)(C) (e.g., a written separation agreement, alimony, or spousal
				maintenance decree, etc.) with your spouse concerning marital separation and
				you and your spouse are not members of the same household by the end of the tax
				year.
Question 1B: I am still legally married and I meet the
				  "unmarried" requirements in Answer 1A. If my spouse is not eligible for a WFTC
				  refund, does that disqualify me from receiving the WFTC refund?
Answer 1B:
No. If you are filing a separate
				  federal income tax return from your spouse, you will not be disqualified from
				  receiving the WFTC refund solely because your spouse does not meet the WFTC
				  requirements as you are considered to be a separate individual from your spouse
				  . If you are filing your federal income tax return under the "married filing
				  separately" status for the 2023 tax year and beyond, the department will not
				  require documentation to establish your "unmarried" status or that you meet the
				  "unmarried" requirements as indicated in Answer 1A. If you are filing your
				  federal income tax return under the "married filing separately" status for the
				  2022 tax year, the department will require additional documentation to
				  establish your "unmarried" status as indicated in Answer 1A.
The following subsections (2) through (6) of this rule
				  describe these eligibility requirements in subsection (1)(a) through (e) of
				  this rule.