HB 1477 — Making changes to the working families' tax credit.

H-1082.1H-0477.3 SUBSTITUTE HOUSE BILL 1477 State of Washington 68th Legislature 2023 Regular Session By House Finance (originally sponsored by Representatives Thai, Street, Doglio, Berry, Chapman, Santos, Ryu, Alvarado, Ramel, Macri, Ormsby, Leavitt, Pollet, and Fey)Fey READRead FIRSTfirst TIMEtime 02/13/23.01/20/23.

Referred to Committee on Finance.

amending 2021 c 195 s 4 (uncodified);

creatingand aproviding newan section;effective date.

providing an effective date;

and providing a contingent expiration date.

and p.(B) Properly files a federal income tax return for the prior federal tax year, and was a Washington resident during the year for which the credit is claimed.

1p. SHB 1477 (B) Properly files a federal income tax return for the prior federal tax year, and was a Washington resident during the year for which the credit is claimed.

1 HB 1477 (ii) "Eligible low-income person" also means an individual who((:

(A) Meets)) meets the requirements provided in (a)(i)(B) of this subsection((;)) and (((B)(((B))): Would)) would otherwise qualify for the credit provided in Title 26 U.S.C.

(A) Would otherwise qualify for the credit provided in Title 26 U.S.C.

32 of the internal revenue code except ((forfor the fact))fact that ((the))the oneindividual orfiled anya combinationfederal income tax return for the prior federal tax year using a valid individual taxpayer identification number in lieu of a social security number, and the followingindividual's conditionsspouse, apply:if any, and all qualifying children, if any, have a valid individual taxpayer identification number or a social security number;

(A)or The(B) individualWould filedotherwise aqualify federal income tax return for the priorcredit federalprovided tax year using a valid individual taxpayer identification number in lieuTitle of26 aU.S.C. social security number, and the individual's spouse, if any, and all qualifying children, if any, have a valid individual taxpayer identification number or a social security number ;

or (B) The individual filed their federal income tax return for the prior federal tax year under the married filing separately status.

For purposes of the refund provided in this section, the special rule for separated spouse under Title 26 U.S.C.

32(d)(2)(B)32 of the internal revenue code doesexcept notthat apply.the individual files their federal income tax return as married filing separately.

"Washington resident" also includes an individual who is not physically present and residing in this state for at least 183 days but is the spouse of p.a Washington resident.

2 SHB 1477 a Washington resident.

(ii)p. $600 for eligible persons with one qualifying child;

2 HB 1477 (ii) $600 for eligible persons with one qualifying child;

(d) The refund amounts in this section shall be adjusted for inflation every year beginning January 1, 2024, based upon changes in the consumer price index that are published by November 15th of the p.previous year for the most recent 12-month period.

3 SHB 1477 previous year for the most recent 12-month period.

(f)p. The percentage rate of remittance reductions in (b) of this subsection must be adjusted every year beginning January 1, 2023, based on calculations by the department that result in the minimum credit being received at the maximum qualifying income level.

3 HB 1477 (f) The percentage rate of remittance reductions in (b) of this subsection must be adjusted every year beginning January 1, 2023, based on calculations by the department that result in the minimum credit being received at the maximum qualifying income level.

(B)(I)(B) A person may apply for any refundrefunds for which they were eligible but did not claim under (a)(ii)(A) of this subsection (4) for up to three additional years.

AAn person must complete an application tomay claimnot thisbe refundaccepted withinmore thethan three calendar years after the end of the calendar year in which the relevant federal income tax return for that tax year was legallyfiled. due for federal income tax purposes, without regard to any federal extension.

(II)For Ifapplications afor personrefunds seeksunder tothis increasesubsection (4)(a)(ii)(B), the amountdepartment ofmust ause refundthe thatfederal hastax beenfiling madefor under this subsection (4), the persontax mustyear apply for thewhich amendeda refund withinis thebeing nonclaimsclaimed periodto establishedcalculate underthe RCWrefund. 82.32.060(1).

p.

4 SHB 1477 (III) For applications for refunds under this subsection (4)(a)(ii)(B), the department must use the federal tax filing for the tax year for which a refund is being claimed to calculate the refund.

32(k)(1)32 (k)(1) of the internal revenue code or for any year for which the individual is ineligible to claim the credit in Title 26 U.S.C.

3232(k)(2) (k)(2) of the internal revenue code.

(c) The department shall, in conjunction with other agencies or organizations, design and implement a public information campaign to informp. potentially eligible persons of the existence of, and requirements for, the credit provided in this section.

4 HB 1477 inform potentially eligible persons of the existence of, and requirements for, the credit provided in this section.

p.(a) Interest as provided under RCW 82.32.050 applies to assessments authorized under this subsection (8) starting six months after the date the department issued the assessment until the amount due under this subsection (8) is paid in full to the department.

5 SHB 1477 (a) Interest as provided under RCW 82.32.050 applies to assessments authorized under this subsection (8) starting six months after the date the department issued the assessment until the amount due under this subsection (8) is paid in full to the department.

(c) If the department finds by clear, cogent, and convincing evidence that an individual knowingly submitted, caused to be submitted, or consented to the submission of, a fraudulent claim for refundp. under this section, the department must assess a penalty of 50 percent of the overpaid amount.

5 HB 1477 refund under this section, the department must assess a penalty of 50 percent of the overpaid amount.

(2) The department must submit a report to the finance committee of the house of representatives and the ways and means committee of p.the senate on a biennial basis.

6The SHBreport 1477must include relevant data collected from administration of the senateworking onfamilies' tax credit, including demographic data, as well as a biennialquantitative basis.summary of challenges and success of program administration.

The report must include relevant data collected from administration of the working families' tax credit, including demographic data.