The bill creates and continues a refundable Working Families' Tax Credit (WFTC) funded by Washington sales and use tax for calendar years beginning on or after January 1, 2022, and amends RCW 82.08.0206 to set eligibility, calculation, administration, audits, application procedures, and overpayment assessment rules. It defines eligibility largely by reference to the federal Earned Income Tax Credit (26 U.S.C. §32), explicitly includes some filers who used ITINs or filed married filing separately under limited conditions, and adopts defined terms for income, qualifying child, Washington resident, and other program elements. The Department of Revenue is authorized to adopt rules, protect recipient data, run a public information campaign, work with the IRS to pursue automatic administration when practicable, accept electronic applications with paper on request, issue assessments, and collect overpayments with interest and, in certain cases, penalties under chapter 82.32 RCW. The bill sets application timing and nonclaims periods (generally applications in the year after the federal return; no refunds before 2022; a limited three-year catch-up claim option), requires specified refund amounts for 2023 and inflation adjustments beginning January 1, 2024, and directs annual adjustments to phase-down percentages beginning January 1, 2023. For routine overpayment assessments, interest under RCW 82.32.050 applies beginning six months after the department issues the assessment; however, if the department finds by clear, cogent, and convincing evidence that an individual knowingly submitted or caused a fraudulent claim, it must assess a penalty equal to 50 percent of the overpaid amount (in addition to other applicable penalties), and interest for those assessments is computed starting from the last day of the month following the department's receipt of the WFTC application rather than after six months. The act also adds a new section to chapter 74.09 RCW requiring, subject to federal and state confidentiality laws, that the Department of Revenue and "the authority" enter into a memorandum of understanding to establish necessary information‑sharing practices for RCW 82.08.0206, and specifies that chapter 82.32 RCW governs administration of the section. The act is applied prospectively and retroactively to January 1, 2023. The provided text omits the remainder of one penalty sentence, the identity or definition of "the authority," and any additional new sections or amendments referenced in the bill header, so those provisions are unclear from the extracted facts.

If enacted, lowand moderate-income Washington residents who qualify for the federal Earned Income Tax Credit — including many who used ITINs or who filed married filing separately under the specified exceptions — become eligible for a refundable state working families’ tax credit paid from sales and use tax revenue for tax years starting in 2022. The Department of Revenue must run outreach, adopt rules, protect recipient data, work with the IRS for possible automatic administration, accept electronic (and paper on request) applications, and make annual inflation and phase-down adjustments to refund amounts and rates; people may apply in the year after their federal return and can claim some missed refunds going back up to three additional years, with the law applied retroactively to January 1, 2023. Practically, eligible families can expect new cash refunds that lower their net tax burden, while the state will need to allocate sales and use tax revenue to pay those refunds and absorb administration and outreach costs. The Department of Revenue takes on ongoing responsibilities and new interagency information‑sharing duties, and applicants face enforcement risks: overpayment assessments can carry interest, and the department can impose a 50 percent penalty plus other penalties if it finds a claim was knowingly fraudulent. Important details are missing from the provided text — for example the exact refund amounts, which agency is referenced as “the authority,” and some penalty mechanics — so some implementation impacts remain uncertain.