The Working Families Tax Credit (WFTC) is a new statewide tax credit for low to moderate income households in Washington state. The WFTC will provide a direct cash boost of $50 to $1,200 per year for nearly one in six households in Washington, helping people to pay for basic needs, such as groceries, car payments, and school supplies. The WFTC was put into law in 2021 after years of advocacy from the Working Families Tax Credit Coalition, a coalition of over 50 organizations with core values of racial and economic justice in Washington state.

Unfortunately, when the Department of Revenue (DOR) released their draft rule in May of this year, there were many administrative barriers included that would make accessing the credit difficult for people facing barriers to access, including survivors of domestic violence, people experiencing homelessness, and those filing their taxes with an Individual Tax Identification Number (ITIN). Advocates were concerned about the following barriers in the application process:

1. Requiring that every applicant submit a government-issued photo ID.
2. Requiring extensive documentation of residency instead of accepting self-attestation.
3. Requiring documentation that ITIN filers receive notice from the IRS that their ITIN application or renewal has been processed in order to receive the credit (even though there is on average, a 3 month wait due to IRS backlogs).
4. Limiting the time when people can apply to one year.
5. Requiring applicants pay back overpayments with interest even in cases of unintentional error or the agency’s administrative error.

Key wins by advocates

Thanks to powerful testimony and advocacy from community members, DOR has addressed some of our concerns and removed some barriers, including: 

Allowing people to apply without a photocopy of their ID

Removing the requirement to include a photo copy of a state or tribal issued ID was a huge win for accessibility for the lowest income taxpayers. This would have represented a barrier for many applicants, especially those experiencing homelessness. Applicants will still have the option of including their state issued ID number.

Streamlining the ways that people provide proof of residency

DOR removed the requirement that applicants list every address they have lived at in the past year. This requirement would have been an extra burden on the lowest income applicants, and especially on domestic violence survivors, who may move many times in a year as they re-establish their lives and find stability.

Making sure people who file their taxes with an ITIN can still apply for the WFTC, even if the IRS experiences delays

People who file their taxes with an ITIN must apply for that ITIN with the IRS, and there are often long processing delays. As long as their application for an ITIN is completed before December 31st, their Working Families Tax Credit application won’t be denied. This will ensure anyone who applies for their credit can receive it, even if the IRS has a delay.

What more can be done?

There are still some changes that can be made in the future to make the application process equitable and accessible. These include allowing people to apply for up to three years, and removing the requirement that people repay any overpayments, with interest, in the case of error or honest mistakes. When considering other similar programs, the majority of mis-claims happen due to honest mistakes and the complexity of the application. Punishing people for mistakes could push people further into poverty.

Accessibility will be key for people filing their taxes with an ITIN

People filing with an ITIN will face barriers to access, and continuing to streamline and simplify the WFTC application process will make it easier for these important members of our communities  to access this credit. 

Many simple changes, like allowing them to receive their WFTC when they apply instead of waiting for the IRS to process their ITIN application or renewal, would mean big changes in accessibility. People using an ITIN contribute to our local economy and pay taxes, but are often unjustly excluded from the benefits that are funded through their tax dollars, like the Earned Income Tax Credit, or unemployment insurance.

Another important change would be removing the requirement that children claimed on the application also have an ITIN, which will be a burden on parents navigating a complicated tax system.