The bill creates a refundable working families' tax credit funded by sales and use tax and amends RCW 82.08.0206. The credit is available for calendar years beginning on or after January 1, 2022, with specified refund amounts for 2023 and thereafter ($300 with no qualifying children, $600 for one child, $900 for two children, $1,200 for three or more). The credit phases down by income using earned income as defined in 26 U.S.C. §32, provides a minimum $50 rule if a calculated refund is greater than zero but less than $50, and requires annual inflation adjustments beginning January 1, 2024 using the Seattle area CPI. Eligibility generally follows the federal tax credit under 26 U.S.C. §32 with specific state exceptions for filers using ITINs, certain married filing separately filers, and applicants who are at least 18; definitions for resident status and other terms are included. The Department of Revenue is directed to administer the credit, accept and verify applications (including automated verification and audits), protect recipient privacy, run public outreach, work with the IRS to enable automatic administration when practicable, and adopt necessary rules. The department may assess overpayments (and in some cases a spouse for joint returns), require retention of records, and apply interest on assessed overpayments beginning six months after assessment. Refunds issued under the section do not accrue interest. If the department finds by clear, cogent, and convincing evidence that a claimant knowingly submitted a fraudulent claim, it must assess an additional penalty equal to 50 percent of the overpaid amount; this penalty is in addition to any other applicable penalties. Amended or unclaimed refund claims are allowed under specified timing rules and must comply with existing nonclaims periods in chapter 82.32 RCW. The act adds a tax preference performance review: the Joint Legislative Audit and Review Committee (JLARC) must review the preference in 2028 and every 10 years thereafter and may cause RCW 82.08.0206 to expire if a review finds the credit does not provide meaningful relief (expiration occurs at the end of the calendar year two years after the final report). The act takes effect January 1, 2026. The provided extracts are incomplete in places: some penalty language in subsection (8)(b) is cut off, a 2025 chapter citation is partially missing, and the full new section text and some procedural details are not present in the excerpts.

If enacted, lowand middle-income workers who qualify under federal Earned Income Tax Credit rules would likely receive an annual remittance to offset sales and use tax — roughly $300 for those with no qualifying children up to $1,200 for families with three or more children in 2023 dollars, with annual inflation adjustments starting in 2024. Eligible people can apply during the year after their federal return or claim unclaimed refunds for up to three additional years, and receipt of the remittance cannot be used to deny state income support or count against public charge determinations, so most recipients should see small but direct increases in household cash flow without risking those benefits. The Department of Revenue would be responsible for running applications, eligibility checks, audits, privacy protections, outreach, and working with the IRS to enable automatic delivery when possible, which means increased administrative workload and likely upfront and ongoing costs for verification and public information. The department can recover overpayments, charge interest on assessments after six months, and may impose a 50 percent penalty for knowingly fraudulent claims, raising risks for people who file improperly; the Joint Legislative Audit and Review Committee will review the program in 2028 and every ten years and could recommend ending it if it fails to provide meaningful relief. Important details are unclear in the provided text, including the precise effective mechanics given the act’s January 1, 2026 effective date despite coverage back to 2022, the identity of the named administering department in one chunk, and an incomplete penalties provision.