Who may claim children for Washington's Working Families Tax Credit when both parents claim the same children for the same year?

Plain-English summary

The Washington Department of Revenue denied a 2022 Working Families Tax Credit claim after applying the qualifying-child tiebreaker to two parents who claimed the same children. The children lived with the other parent for more days during the year, so only that parent could use them for the federal EITC-based income threshold.

Both parents lived with the children from January 1 through December 1, 2022. From December 2 through December 31, the children lived with the other parent. The applicant argued that both parents had lived with the children and that the applicant paid medical and childcare costs and was named on the home lease. But WAC 458-20-285's controlling tiebreaker asks which parent the children lived with longer, not who paid those expenses.

After adding self-employment income shown on the applicant's federal transcript and removing the children, the applicant exceeded the income limit for a single person with no qualifying children. The Department assessed repayment of the credit, later penalties, and interest. The applicant supplied no evidence contradicting the other parent's custody and residency records and did not establish that the assessment or additions were improper. The petition was denied.

What this means for you

Parents filing separate claims

When both parents claim the same child, count the child's nights or days of residence carefully. If one parent had the child longer, that parent wins the tiebreaker for the EITC-linked Washington credit.

Working Families Tax Credit applicants

The credit uses information from a properly filed federal return and federal EITC concepts, including income thresholds and qualifying children. Include self-employment income and respond promptly to requests for federal returns, Schedule EIC, parenting plans, or residency evidence.

Tax preparers and community organizations

Coordinate claims when possible. A duplicate-child claim can trigger manual review after an automated refund, followed by repayment, interest, and penalties if eligibility changes.

Common questions

Q: Do medical expenses, childcare payments, or being named on the lease decide the tiebreaker?

A: No. In this case the controlling rule was which parent the children lived with longer during the tax year.

Q: What if the children lived with each parent for exactly the same amount of time?

A: WAC 458-20-285 then gives the claim to the parent with the higher adjusted gross income for the year.

Q: Why did removing the children eliminate the applicant's credit?

A: The applicant's corrected income exceeded the federal threshold for a single person with no qualifying children. The higher two-child threshold was unavailable after the tiebreaker.

Q: Could the applicant correct mistakes?

A: The determination says an applicant may amend the Washington application, and if the federal return was wrong, must first amend that return with the IRS and then amend the state application.

Q: The PDF headnote cites RCW 82.08.206. Is that the operative citation?

A: The determination's issues and analysis cite RCW 82.08.0206 for the Working Families Tax Credit; the shorter number appears only in the headnote.

Citations and references

• RCW 82.08.0206 and WAC 458-20-285, especially Answers 10C, 10E, and 10H
• 26 U.S.C. § 32 and IRS Publication 596, Rule 9 (federal EITC and child tiebreakers)
• RCW 82.32.050, .080, and .090; WAC 458-20-228(7) (assessment, payments, penalties, and interest)

Source

• Landing page: Washington Tax Decisions ZIP files
• Original PDF: 45WTD118.pdf
• Source archive: Volume 45 ZIP (member wtdvol45/45WTD118.pdf)

Original ruling text

Det. No. 24-0266, 45 WTD 118 (June 9, 2026)

118

Cite as Det. No. 24-0266, 45 WTD 118 (2026)
BEFORE THE ADMINISTRATIVE REVIEW AND HEARINGS DIVISION
DEPARTMENT OF REVENUE
STATE OF WASHINGTON
In the Matter of the Petition for Review for
Denial of Working Families’ Tax
Remittance
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DETERMINATION
No. 24-0266
Account No. . . .

RCW 82.08.206; WAC 458-20-285; WORKING FAMILIES TAX CREDIT – FEDERAL EARNED INCOME TAX CREDIT ADJUSTED GROSS INCOME THRESHOLD - QUALIFYING CHILDREN TIEBREAKER RULES: When two separate parents claim the same two qualifying children on their individual Working Families Tax Credit Applications, only the parent with whom the child lived the longest during the year is entitled to the claim the child for income threshold purposes per the Department’s “tie-breaker” rules. Headnotes are provided as a convenience for the reader and are not in any way a part of the decision or in any way to be used in construing or interpreting this Determination. Doering, T.R.O. – An individual contests an assessment under the Department’s Working Families Tax Credit program for the 2022 tax year, arguing the Department incorrectly removed two qualifying children from Applicant’s application. We deny the petition. 1 ISSUES

1. Under RCW 82.08.0206 and WAC 458-20-285, does an individual meet the eligibility
   requirements for the Working Families Tax Credit [(WFTC)] when another party previously claimed the same two qualifying children for the same tax year?
2. Whether an individual is entitled to a penalty waiver under RCW 82.32.105 and WAC 45820-228.

1 Identifying details regarding the taxpayer and the assessment have been redacted pursuant to RCW 82.32.410.

Administrative Review & Hearings Division
P O Box 47460 Olympia, WA 98504-7460
dor.wa.gov Phone (360) 534-1335

Det. No. 24-0266, 45 WTD 118 (June 9, 2026)

119

FINDINGS OF FACT
. . . (Applicant) is an individual residing in Washington. On April 14, 2023, the Department received Applicant’s WFTC application for the 2022 tax year (Tax Year). In the application, Applicant reported earned income of $ . . . for the Tax Year and claimed two qualifying children. On May 8, 2023, the Department’s automated system approved Applicant’s WFTC application for the Tax Year and issued Applicant a refund of $ . . . . After Applicant received the refund, the Department’s WFTC Division manually reviewed the application and determined that they needed more information to confirm that Applicant was, in fact, entitled to the refund [they] already received. On June 13, 2023, the Department sent Applicant a request for more information related to the residency of the two qualifying children [they] claimed because another party had claimed the same children on a separate WFTC application . . . . On June 14, 2023, the Department also sent Applicant a request for a copy of Applicant’s 2022 federal income tax return with a copy of the schedule EIC . . . . On September 13, 2023, the Department sent a Notice of Balance Due in the amount of $. . . with a due date of March 13, 2024, to Applicant after a manual review showed the qualifying children were also claimed by the children’s other parent. . . . The Department reviewed a parenting plan showing proof of residency and guardianship provided on the other parent’s WFTC application and determined that the other parent was the custodial parent for the purposes of the [Earned Income Tax Credit] (EITC) and removed them from Applicant’s account. Based on that documentation, the Department determined that Applicant and the children’s other parent ceased to live in the same place on December 1, 2022, and on December 2, 2022, the children resided with the children’s other parent the remaining days of the Tax Year. The Department then reduced Applicant’s WFTC from $ . . . to $ . . . due to the removal of the qualifying children. On October 27, 2023, a second Notice of Balance due was issued showing a balance due of $ . . . and a due date of March 13, 2024, . . . . On December 1, 2023, the Department sent Applicant a notice stating their application had been denied due to a failure to provide the additional information requested . . . . On March 1, 2024, Applicant provided a copy of their 2022 tax transcript. On March 15, 2024, the Department issued a third Notice of Balance Due in the amount of $. . . showing an increased WFTC overpayment of $. . . , an assessment penalty in the amount of $. . . , and interest in the amount of $. . . due to the rejection of Applicant’s application on December 1, 2024, and Applicant’s failure to pay the assessment before the due date. . . . . On March 27, 2024, the Department determined that Applicant had excluded their self-employment income from their WFTC application and added $. . . of self-employment income with a $. . . tax deduction, bringing their total income for the Tax Year to $ . . . . On May 22, 2024, Applicant submitted a Petition for Review. Applicant argues in their petition, “both Mom & Dad claimed kids, when children lived with both Mom & Dad[.] Dad paid all medical, childcare, and name was on home lease. Copies of proof turned in already.” Taxpayer’s Petition, pg. 3. Applicant did not request a hearing on their petition.

Administrative Review & Hearings Division
P O Box 47460 Olympia, WA 98504-7460
dor.wa.gov Phone (360) 534-1335

Det. No. 24-0266, 45 WTD 118 (June 9, 2026)

120

On June 14, 2024, the Department sent a request for additional information as Applicant’s Petition for Review did not include any additional documentation to support Taxpayer’s arguments. . . . The Department stated in the request, “to preserve our jurisdiction over your petition for review we will accept the document dated May 21, 2024, as timely filed. However, a petition for review must comply with WAC 458-20-100, which requires an adequate statement of facts and reasons for the review and documents supporting the [applicant’s] position. Such information is necessary in order for us to better evaluate your case.” Id. Applicant did not respond to this request for more information and the Department was unable to make contact [with] Applicant. ANALYSIS

1. Eligibility for Working Families Tax Credit
   The WFTC is a tax credit provided to eligible low-income persons in the form of a refund of retail sales and use taxes paid after January 1, 2022. RCW 82.08.0206(1). The Department calculates an applicant’s WFTC refund amount based on the applicant’s “properly filed federal income tax return for the period for which [the applicant is] claiming the refund.” WAC 458-20-285 (“Rule 285”), Answer 10C. The definition of an “eligible low-income person” is composed of five elements. See generally RCW 82.08.0206; Rule 285, Part 1.
2. The individual must have a valid Social Security number (“SSN”) or Individual Taxpayer
   Identification number (“ITIN”). Rule 285(1)(a).
3. The individual must have properly filed a federal income tax return for the prior federal tax
   year. RCW 82.08.0206(2)(a)(i)(B); Rule 285(1)(b).
4. The individual generally must be eligible for the federal EITC provided in Title 26 U.S.C.
   Sec. 32 of the Internal Revenue Code, “including meeting the federal income thresholds,” regardless of whether the individual actually claimed or received the EITC. 2 RCW 82.08.0206(2)(a)(1)(A); Rule 285(1)(c).
5. The individual must have been a Washington resident during the year for which the
   individual claims the WFTC. Rule 285(1)(d).
6. The individual must have paid Washington sales or use tax on taxable purchases made
   during the tax year for which the individual claims the refund. Rule 285(1)(e). Here, the primary element of this dispute is whether Applicant meets the federal income thresholds to be eligible for the EITC. Specifically, the issue before us is whether Applicant’s two children are “qualifying children” under the rules of the EITC. As such, this analysis will primarily address that element. To qualify for the EITC, an applicant’s income “must be below the federal adjusted gross income (AGI) threshold . . . .” Rule 285(4). If the applicant’s AGI is “at or above the federal income threshold, [the applicant is] not eligible for the EITC” and, therefore, ineligible for the WFTC. 2

An individual will meet this element if the individual or the individual’s spouse or qualifying children “have a valid ITIN instead of a SSN, which is not permitted under federal EITC eligibility requirements.” Rule 285(1)(c).

Administrative Review & Hearings Division
P O Box 47460 Olympia, WA 98504-7460
dor.wa.gov Phone (360) 534-1335

Det. No. 24-0266, 45 WTD 118 (June 9, 2026)

121

Rule 285(4). The AGI threshold for a single person with no qualifying children for the Tax Year is $16,480 while the AGI threshold for a single person with two qualifying children is $49,399. .. Rule 285, Answer 10(E). Here, Applicant’s earned income as initially reported on their WFTC application was $. . . , which was below both limits. However, the Department later determined that Applicant’s income was, in fact, $. . . after analyzing Applicant’s federal tax transcript for the Tax Year. This increase puts Applicant’s income over the threshold for a single person with no qualifying children. Applicant has made no argument that the Department incorrectly increased Applicant’s income for the Tax Year. Thus, Applicant will only qualify for the EITC, and consequently, the WFTC, if they are able to claim their children as qualifying children. As such, our analysis now turns to whether Applicant may claim these two children as qualifying children for the purposes of the EITC and WFTC. In situations where several people could potentially claim the same qualifying child, the Department must use the following hierarchy of “tie breaker” rules set forth in Rule 285 to determine who can claim the child: (a) If only one person is the child’s legal parent (“parent”): The parent may claim the child; (b) If both parents file a joint tax return with each other: They may claim the child; (c) If both parents claim the child on separate tax returns: The parent with whom the child lived with the longest during the year may claim the child; (d) If the child lived with each parent for the same amount of time: The parent with the higher AGI for the year may claim the child; (e) If neither parent can claim the child: The person who had the highest AGI for the year may claim the child; and (f) If a parent can claim the child but does not: The person who had the highest AGI for the year may claim the child, but only if that person’s AGI is greater than the AGI of any of the child’s parents who can claim the child. Rule 285, Answer 10H (emphasis added). See also IRS Publication 596, Rule 9. Here, Rule 285, Answer 10(H)(a) and (b) do not apply to the Applicant’s situation. Applicant argues that the two children lived with both parents during the tax year and that Applicant paid for all medical care, childcare, and was the name on the lease where the children lived. However, the Rule 285 tiebreaker rules must be strictly applied, and the analysis must only focus on who the children lived with the most days during the Tax Year.

Administrative Review & Hearings Division
P O Box 47460 Olympia, WA 98504-7460
dor.wa.gov Phone (360) 534-1335

Det. No. 24-0266, 45 WTD 118 (June 9, 2026)

122

The other parent provided documentation with their own WFTC application that showed that the two parents lived together from January 1, 2022, until December 1, 2022. The other parent then had primary custody of the two children from December 2, 2022, to December 31, 2022. Applicant has provided no documentation to refute the documentation provided by the other parent. Thus, the two children lived with the other parent longer during the Tax Year and the Department correctly determined the other parent was the custodial parent for purposes of the EITC and WFTC. Therefore, Applicant was unable to claim the two children as qualifying children, Applicant did not meet the federal income threshold to be eligible for the EITC to qualify for the WFTC, and the Department properly issued an assessment for the full refunded amount.

2. Penalty Waiver
   Taxpayers have certain rights and responsibilities under Washington law, including the responsibility to file accurate returns and pay their taxes in a timely manner. Ch. 82.32A RCW. In the event the Department determines that a taxpayer has paid less tax than was properly due, the Department “shall assess against the taxpayer such additional amount found to be due.” RCW 82.32.050(1). Whenever the Department issues an assessment for unpaid taxes, it must also include interest. Id. Interest is calculated from the last day of the month following the final period assessed. WAC 45820-228(7). Upon receiving payment from a taxpayer, the Department must apply the payment to interest and penalties first, then to tax, without regard to any direction from the taxpayer. RCW 82.32.080(5)(a). If a taxpayer fails to pay an assessment by the due date, the Department must assess an assessment penalty of 15 percent of the taxes due. RCW 82.32.090(2). The assessment penalty will increase to a total of 25 percent of the taxes due if the taxpayer does not submit payment to the Department by the 30th day following the assessment’s due date. Id. The Department must impose interest and penalties when the conditions for imposing them are met. RCW 82.32.090(1); Det. No. 01-193, 21 WTD 264 (2002); Det. No. 99-279, 20 WTD 149 (2001). Here, Applicant does not argue that the penalties or interest were improperly assessed by the Department, only that they were entitled to the WFTC. As previously determined, Applicant was not eligible for the WFTC. Thus, the Department properly issued the assessment against Applicant and Applicant failed to pay the assessment or request a Petition for Review before the due date of the assessment. Therefore, the Department properly imposed the penalties and interest[] on the assessment. In closing, if Applicant made a mistake on their WFTC application, they could file an amended application. Applicant can visit our website for more information at workingfamiliescredit.wa.gov, or contact our call center during business hours at 360-763-7300.

Administrative Review & Hearings Division
P O Box 47460 Olympia, WA 98504-7460
dor.wa.gov Phone (360) 534-1335

Det. No. 24-0266, 45 WTD 118 (June 9, 2026)

123

If Applicant made a mistake on their federal income tax return, they must amend their return with
[the] IRS first, and then amend their application for the WFTC. Applicant can contact the person or organization that helped them file their federal income tax return or visit irs.gov/1040x for more information. DECISION AND DISPOSITION We deny the petition. Dated this 22nd day of November 2024.

Administrative Review & Hearings Division
P O Box 47460 Olympia, WA 98504-7460
dor.wa.gov Phone (360) 534-1335