Less than half of WA families who qualify for new tax credit are applying

(The Center Square) – Washington state officials say they are on track to meet the goal of having 50% of eligible families applying for and receiving a tax credit for moderate- and low-income families by this time next year.

The Working Families Tax Credit is an annual tax refund for Washington residents worth up to $1,255, depending on income level and the number of qualifying children in a household.

According to Gov. Jay Inslee, the Working Families Tax Credit is about tax fairness.

“This is one of the largest tax cuts in the history of the state of Washington,” Inslee said during a Tuesday morning meeting of the Governor’s Results Initiative focused on the Working Families Tax Credit.

Per information presented at the meeting, 45% of eligible households claimed the credit in its first year.

The tax credit became law in 2008, but was not fully funded by lawmakers until 2021 when COVID-19 dollars from the federal government were funneled into the program.

Lori Pfingst, senior director of poverty at the Department of Social and Health Services, said the direct payments to families change lives.

“Targeted tax credits like the Working Families Tax Credit are especially effective at reducing poverty and inequality,” she said. “Most people who are in poverty are working, raising families and doing everything they can to make ends meet.”

She said checks sent to struggling families during the pandemic made a huge difference.

“Direct payments made to people during the pandemic brought 196,000 Washingtonians up out of poverty," Pfingst touted.

She went on to say, “The child tax credit reduced racial disparities dramatically."

Immigration status is an issue with the tax credit.

Nearly 10% of those who have applied for and received the Washington Families Tax Credit do not have Social Security numbers, according to the public performance review, but do have Individual Taxpayer Identification Numbers, often because of immigration status.

Outreach efforts continue, given the large percentage of qualified families not applying for the benefit.

To meet the goal of 50% of eligible recipients filling out applications for the tax credit, the Department of Revenue recommends additional state funding for media campaigns and partnerships with community groups to simplify and help potential recipients through the application process.