Working Families Tax Credit: What You Need to Know

By Keri O' Connell, Department of Revenue

Beginning Jan. 1, 2023, Washington citizens may qualify for a sales tax refund, similar to the federal Earned Income Tax Credit. This new refund program – referred to as the Working Families Tax Credit, is administered by the state Department of Revenue. It provides a credit for a portion of sales taxes paid by eligible taxpayers.

Eligibility and funding for the Working Families Tax Credit program was provided through legislation passed during the 2021 session (ESHB 1297). This program is intended to support Washington’s low-income working families/individuals.

Eligible persons

To qualify for this credit, all of the following must apply for the year the credit is claimed:

• Filed a federal income tax return (individual or joint) as a Washington resident.
• Resided in Washington State for more than 180 days of the year.
• Either filed a federal income tax return with a valid Social Security Number and met the qualifications for the federal Earned Income Tax Credit, or filed the federal income tax return with an Individual Taxpayer Identification Number and would have otherwise qualified for the federal Earned Income Tax Credit.

Credit amount

The credit amount varies depending on the number of qualifying children and income level, and ranges from $300 to $1,200 (see table below). These amounts are then reduced based on income thresholds, similar to the federal program. The minimum credit amount is $50, regardless of the number of qualifying children.

How to apply

The Department of Revenue will start accepting refund applications under this program after Jan. 1, 2023. Please refer to dor.wa.gov for additional information as it becomes available.