A "Working Families Credit" in Washington State
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Feb 6, 2008
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As part of our work with the Seattle - King County Asset Building Collaborative, led by Senior Fellow Diana Stone, Washington Appleseed has conducted research about the feasibility of implementing a state credit for low-income families, similar to the federal Earned Income Tax Credit.
The federal Earned Income Tax Credit (EITC) is a tax reduction and wage supplement for low- and moderate-income working families. The credit is based on family size and earnings. For families with very low incomes, the amount of the credit increases as earnings increase until it reaches the maximum for that family size -- $428 for families with no children, $2,853 for families with one child, and $4,716 for families with two children (figures based on 2007, figures to increase for 2008). The credit begins phasing out for families with children at $16,810 and ends completely at $38,348.
In 2003, about 22 million families claimed the EITC. It now lifts more than 4 million people -- half of them children -- out of poverty. Because it targets working families, the program has received broad, bipartisan support at the national level.
State and local governments across the country have embraced the program as a means to combat poverty. Twenty-two states, the District of Columbia, and four local governments had enacted EITC programs modeled after the federal program.
In Washington State, legislation has been introduced into the 2008 state legislative session to create a Working Families Credit.
Through Washington Appleseed, the pro bono research work of Michele Radosevich, a partner in the governmental relations practice at Davis Wright Tremaine, has been an invaluable contribution to the discussion about a Working Families Credit in Washington State.
In the News
The Working Families Credit legislation is making headlines across Washington State. A sampling of related news media:
State legislators consider sales tax credit (Seattle Times, Jan 25, 2008)
Legislative outlook: real tax relief (Seattle PI, Jan 9, 2008)
Bill would add 10 percent credit for working poor (Spokesman Review, Jan 24, 2008)
More information about state EITC programs can be found at the State EITC Online Resource Center.
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