SSB 5771
In CommitteeSenate
WFTC increase/tenants
Increasing the working families' tax credit to reflect the economic impact of property taxes incorporated into rental amounts charged to residential tenants.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill increases the Working Families' Tax Credit (WFTC) by adding a new $300 refund for low-income renters and adjusting all credit amounts annually for inflation. It also expands who qualifies for the credit, including ITIN users and people filing separately. The rental supplement starts in 2026 and requires proof of renting for at least 183 days.
- Starting in 2026, eligible low-income renters who lease or rent their primary residence in Washington for at least 183 days in the calendar year receive an additional $300 refund, on top of their existing WFTC amount.
- The additional rental supplement is adjusted for inflation each year beginning in 2027, rounded to the nearest $5, and reduced (phased out) based on income above certain thresholds.
- Annual inflation adjustments to all WFTC refund amounts (e.g., $300, $600, $900, $1,200) begin in 2024, based on the Seattle-area consumer price index.
- Expanded eligibility to include individuals who use an Individual Taxpayer Identification Number (ITIN) (instead of a Social Security Number) and those who file as married filing separately, under specific conditions.
- Applicants seeking the rental supplement must submit a copy of their lease or rental agreement and other documentation to verify eligibility, and must meet all existing WFTC requirements.
Who is affected
- Low-income renters — Low-income Washington residents who rent their primary residence and meet income and residency requirements may receive an additional $300 refund starting in 2026 (adjusted for inflation), on top of their existing Working Families' Tax Credit (WFTC).
- Existing WFTC recipients — Low-income individuals and families who already qualify for the WFTC (based on federal Earned Income Tax Credit rules) may receive higher refund amounts due to automatic annual inflation adjustments beginning in 2024.
- Taxpayers using ITINs or filing separately — Individuals who file using an Individual Taxpayer Identification Number (ITIN) or who file as married filing separately may now qualify for the WFTC under expanded eligibility rules.
- State agencies (especially Department of Revenue) — The Washington Department of Revenue will need to update systems, verify rental documentation, and run outreach to support implementation and administration of the expanded credit.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The $300 rental supplement (inflation-adjusted) directly offsets a portion of housing cost burden for low-income renters — a group disproportionately impacted by Washington’s high and rising rent levels — helping families afford shelter without diverting funds from food, healthcare, or transportation.
HousingPeopleRef: RCW 82.08.0206(3)(d)(i)Expanding eligibility to ITIN users and married filing separately individuals significantly broadens access to the credit — many of whom are low-wage workers (e.g., farmworkers, service industry, caregivers) previously excluded due to filing status or documentation, reducing tax inequity for vulnerable populations.
FinancialPeopleRef: RCW 82.08.0206(2)(a)(ii)(A) & (B)Annual inflation adjustments to all WFTC amounts (starting 2024) prevent the credit’s value from eroding over time — ensuring the benefit retains real purchasing power and remains effective as inflation rises, especially important in high-cost areas like Seattle-Tacoma.
FinancialPeopleRef: RCW 82.08.0206(3)(e)The non-participation clause (no use in public charge or income support eligibility determinations) reduces administrative barriers and fear among immigrant families, encouraging uptake and improving program reach — especially important for mixed-status households.
Public SafetyPeopleRef: RCW 82.08.0206(5)The base credit amounts ($300–$1,200) are structured to mirror federal EITC levels and target low-income workers — providing meaningful cash support that lifts households near or below the federal poverty line, particularly those with children.
FinancialPeopleRef: RCW 82.08.0206(3)(a)
Potential Concerns (5)
The bill requires the Department of Revenue to develop and operate a new rental verification system, including reviewing lease agreements and cross-checking residency documentation — a new administrative burden on state agencies and potentially increased compliance costs for low-income renters seeking the credit.
Business & EmploymentRef: RCW 82.08.0206(3)(d)(v)The requirement to submit a signed lease agreement may exclude vulnerable renters (e.g., those in informal or cash-based arrangements, undocumented households sharing housing without formal leases, or people in temporary shelter), reducing actual access to the benefit despite expanded eligibility on paper.
HousingRef: RCW 82.08.0206(4)(a)(vi)The rental supplement is subject to income-based phaseouts, meaning households just above the phaseout threshold (e.g., $2,500–$5,000 above federal EITC limits) may lose the full $300 benefit — creating a steep cliff effect that penalizes modest income gains, disproportionately affecting working families trying to improve their situation.
FinancialLean peopleRef: RCW 82.08.0206(3)(d)(iv) & (v)The bill funds the expanded credit using existing sales and use tax revenue, which is regressive and disproportionately borne by low- and middle-income households — meaning the funding mechanism partially offsets the credit’s progressive intent by relying on consumption taxes that hit lower-income households hardest.
Public SafetyRef: Fiscal Impact SummaryImplementation requires significant administrative effort by the Department of Revenue — including system updates, outreach, and verification — which may strain state resources and delay rollout, especially if federal data-sharing agreements with the IRS are not fully operationalized by 2026.
Local GovernmentRef: RCW 82.08.0206(4)(a)(i) & (vi)
Who Is Most Affected
Low-income renters — especially those in informal housing, with limited documentation, or just above phaseout thresholds — may benefit from the $300 supplement, but may also face barriers to accessing it due to documentation requirements or steep phaseouts.
ITIN users and married filing separately individuals gain new access to the credit, but may still face administrative hurdles (e.g., lack of SSN, complex filing status rules) that reduce actual uptake despite expanded eligibility.
Existing WFTC recipients benefit from inflation adjustments and broader eligibility, but those just above phaseout thresholds may see reduced or eliminated benefits due to the steep phaseout rates.
The Department of Revenue must implement new verification systems and outreach, increasing administrative costs and staffing needs — though this is funded by existing tax revenue, it may divert resources from other priorities.
Landlords and property management companies are not directly affected, but may see indirect effects if increased tenant cash flow improves rent payment reliability — however, the bill does not regulate rent or housing markets, so impact is likely negligible.