Legislative Information - Quarter 4, 2022

Fourth quarter 2022 update

Introducing DOR’s acting director

Gov. Inslee recently named Revenue’s Deputy Director John Ryser as the agency’s acting director effective Sept. 1. John succeeds Vikki Smith, who retired from the department at the end of August after 51 years of service. John has a long history in tax policy and operations at DOR, particularly in auditing. He has most recently served as the executive sponsor overseeing the implementation of the Working Families Tax Credit (WFTC). Given the importance of the WFTC to the department, he will continue supervising that program as acting director.

WFTC implementation update

DOR will launch the Working Families Tax Credit program in just a few months! If you haven’t already, be sure to visit our Working Families Tax Credit website and please share it with your constituents to help raise awareness. The site has helpful information both for families and tax preparers and includes an eligibility tool for people to check if they qualify for up to $1,200.

DOR’s WFTC team has been busy this year building the WFTC program from the ground up; it is unlike any program DOR has ever administered and will be the first such program in a non-income tax state.

We have hired 47 individuals for the program and will hire additional staff in the next fiscal year. The WFTC application is available in 12 languages, and the call center will offer assistance in at least three languages. We have designed the application process to be as accessible as possible while also ensuring it safeguards Washingtonians’ data and tax dollars.

In collaboration with the Department of Commerce, we recently announced the successful community-based organizations to receive grants from the $10 million appropriated during last session to raise awareness of the WFTC, provide application assistance, and more. Alongside the efforts of the grantees, DOR’s own staff have conducted 75 outreach events across 24 counties, to date. In the weeks ahead, we will continue to prepare to begin receiving applications in February 2023.

SB 5980’s impact on small businesses

As a result of the passage of SB 5980 in the 2022 session, DOR estimates that 125,000 small business taxpayers will have a lower tax bill beginning next year. The bill increases the small business B&O credit and raises the filing threshold to $125,000 annually. With that higher filing threshold, an additional 29,000 taxpayers will now fall below the small business credit threshold and won’t have to file a tax return with DOR unless they owe tax other than B&O (most commonly sales tax).

The other Washington: Student loan debt forgiveness

In August, the Biden administration announced that eligible borrowers could have up to $20,000 of student loan debt forgiven. Normally, the federal government considers debt that is waived or reduced to be taxable like income; however, the American Rescue Plan passed last year exempted federal student loan forgiveness from federal income taxation through 2025.

Most income tax states have aligned their tax code with the federal government’s to similarly waive income tax liability. As of this writing, though, borrowers in Arkansas, California, Indiana, North Carolina, Minnesota, Mississippi, and Wisconsin might not be so lucky, according to the Tax Foundation, unless the states’ lawmakers take action.

Here in the Evergreen State, 697,600 residents are eligible for student loan debt forgiveness. As of 2020, the average amount of student loan debt for Washington’s college grads was $23,900.