On February 3, 2005, the Washington Supreme Court rendered its decision in the estate tax class action lawsuit  Hemphill et al. v State of Washington, Department of Revenue.

The Supreme Court has ruled that under chapter 83.100 RCW, the Department of Revenue must conform to the changes made by Congress in 2001 (Public Law 107-16 (H.R. 1836)) and that class action members are entitled to a refund of estate tax paid. The Court remanded the case back to Thurston County Superior Court for an order consistent with its ruling.

Do estates still need to file Washington State Estate Tax Returns?

If an estate is required to file a federal return (see the federal filing threshold below) then it is required to file a  Washington State Estate Tax Return.  A state return is required even if no tax is due.

What is the federal filing threshold?

The following chart shows the federal filing thresholds through the year 2009.

How much estate tax is owed to the state of Washington?

Prior to the court case, taxpayers owed 100% of the state death tax credit to the state of Washington. Now, under Public Law 107-16, the state death tax credit due to the state of Washington is reduced by 25% each year beginning in 2002 and eliminated for deaths occurring on or after January 1, 2005. The following chart outlines this:

What about deaths occurring on or after January 1, 2005?

If an estate is required to file a federal return, then it is required to file a  Washington State Estate Tax Return.  A state return is required although no tax will be due.