Heard of the Working Families Tax Credit? Neither have many local families

LYNNWOOD — For Anila Gill, it feels like everything is getting more expensive these days.

As the prices of rent, gas and other necessities continue to rise, it’s hard for Gill to see where she can make cuts in her budget.

Gill is a mother of two who works at the Edmonds School District. In her free time, she works with the state Department of Revenue’s outreach advisory committee, advocating for more people to apply for the Working Families Tax Credit.

The Legislature created and funded the Working Families Tax Credit in 2021. Depending on income and number of dependents, taxpayers can receive a refund from the state between $50 and $1,255 per year.

It’s a new program, so many don’t know it exists and could be missing out on free money. Though the state has refunded more than $8.3 million to Snohomish County taxpayers, more than $18 million is still available for taxpayers who qualify, according to December 2023 data from the state Department of Revenue.

Just 37% of taxpayers eligible in Snohomish County have received the credit, averaging $689 per household.

This year’s deadline to file a tax return has passed, but there’s still a lot of time to collect this year’s credit. In fact, taxpayers can even collect 2022’s tax credit.

Last year, the Legislature extended the program’s deadlines, allowing taxpayers to apply for the credit for up to three years after filing a return.

This year, Gill collected a $900 refund, which offered a modicum of much-needed relief from rising expenses.

When she tells people at her church or at school about the credit, they get excited, she said, because it gives working families a little more freedom in their budget.

Perla Gamboa, an outreach manager for the Department of Revenue, said the tax credit can reach more people by partnering with community organizations.

“They are helping us promote, spread the word and they can help the people in their areas apply for our program,” she said.

The partnering organizations know their communities well and they reach out to help more underrepresented groups, she said.

In Snohomish County, the state partners with two groups — Workforce Snohomish and PIM Savvy.

Both organizations conduct outreach, especially with residents who don’t speak English. PIM Savvy is working on setting up events at Connect Casino Road in south Everett to reach more Spanish speakers.

Taxpayers can find out if they qualify and apply for the credit on the Department of Revenue’s website.

People with an individual taxpayer identification number, rather than a social security number, are also eligible.

Rep. April Berg, D-Mill Creek, voted for the tax credit in 2021.

“Because our state is unique and doesn’t have an income tax, it is a credit that might fly under the radar,” she said in an interview on Friday.

Without a state income tax, Washington amasses its revenue through sales taxes, business and occupation taxes and property taxes. This means the majority of the tax burden falls onto people with lower incomes.

The lowest income households pay 15.7% of their income on excise and property taxes, while the highest pay 4.4% for the same taxes, according to a 2022 report from the Department of Revenue.

“The underlying policy is because we have an upside down tax code that over relies on sales tax,” Berg said.

The credit is currently only available for taxpayers between the ages of 24 to 65 years old, or people aged 18 and older with a child. This year, legislators tried to expand that, so residents ages 18 to 24 and older than 65 could collect the credit, even without a child.

“There are folks at both ends of the spectrum that can really use the help,” Berg said.

The reform stalled in Olympia this year, but she said the Legislature needs to keep working on it.

Correction: A previous version of this story misstated the qualifications for the Working Families Tax Credit program.

Jenelle Baumbach: 360-352-8623; jenelle.baumbach@herlaldnet.com; Twitter: @jenelleclar.

Aina de Lapparent Alvarez: 425-339-3449; aina.alvarez@heraldnet.com; Twitter: @Ainadla.