H-1846.1
HOUSE BILL 1677
State of Washington
67th Legislature
2022 Regular Session
ByRepresentatives Abbarno, Corry, Boehnke, Klippert, Sutherland, MacEwen, Eslick, Chambers, Graham, Dufault, Gilday, Kraft, Jacobsen, Volz, Griffey, Steele, Young, and J. Johnson
Prefiled 12/20/21.Read first time 01/10/22.Referred to Committee on Finance.
AN ACT Relating to employer tax incentives for the support of veterans and military families; amending RCW 82.04.4498 and 82.16.0499; creating a new section; and providing expiration dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION.  Sec. 1. The legislature recognizes that the impacts of the COVID-19 pandemic on veterans and military families have been especially hard. The legislature also finds that labor shortages are contributing to the ongoing supply chain disruptions facing many industries, and hiring incentives for veterans and their families can help our economy. The legislature intends to extend the expiration date for the tax incentive for hiring veterans, increase the value of the incentive, increase the statewide incentive cap, and expand eligibility. The legislature finds that concerns for underemployment and unemployment of spouses is a major issue for active duty service members. Therefore, the legislature intends to expand eligibility for the previously existing unemployed veteran hiring tax credit to spouses of active duty military and veterans. The legislature finds that the current requirement that a veteran be unemployed for at least 30 days prior to hiring to be eligible for the tax credit can worsen economic hardship rather than expedite economic support, and creates unnecessary administrative complexity that may hinder utilization of the incentive by employers. Therefore, the legislature intends for employers to be eligible for the tax credit regardless of the duration of unemployment.
Sec. 2. RCW 82.04.4498 and 2015 3rd sp.s. c 6 s 1002 are each amended to read as follows:
(1) A person is allowed a credit against the tax due under this chapter as provided in this section. The credit equals twenty percent of wages and benefits paid to or on behalf of a qualified employee up to a maximum of ((one thousand five hundred dollars)):
(a) $1,500 for each qualified employee hired on or after October 1, 2016, but prior to July 1, 2022; or
(b) $3,000 for each qualified employee hired on or after July 1, 2022.
(2) No credit may be claimed under this section until a qualified employee has been employed for at least two consecutive full calendar quarters.
(3) Credits are available on a first-in-time basis. The department must keep a running total of all credits allowed under this section and RCW 82.16.0499 during each fiscal year. The department may not allow any credits that would cause the total credits allowed under this section and RCW 82.16.0499 to exceed ((five hundred thousand dollars))$5,000,000 in any fiscal year. If all or part of a claim for credit is disallowed under this subsection, the disallowed portion is carried over to the next fiscal year. However, the carryover into the next fiscal year is only permitted to the extent that the cap for the next fiscal year is not exceeded. Priority must be given to credits carried over from a previous fiscal year. The department must provide written notice to any person who has claimed tax credits in excess of the limitation in this subsection. The notice must indicate the amount of tax due and provide that the tax be paid within thirty days from the date of the notice. The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.
(4) The credit may be used against any tax due under this chapter, and may be carried over until used, except as provided in subsection (9) of this section. No refunds may be granted for credits under this section.
(5) If an employer discharges a qualified employee for whom the employer has claimed a credit under this section, the employer may not claim a new credit under this section for a period of one year from the date the qualified employee was discharged. However, this subsection (5) does not apply if the qualified employee was discharged for misconduct, as defined in RCW 50.04.294, connected with his or her work or discharged due to a felony or gross misdemeanor conviction, and the employer contemporaneously documents the reason for discharge.
(6) Credits earned under this section may be claimed only on returns filed electronically with the department using the department's online tax filing service or other method of electronic reporting as the department may authorize. No application is required to claim the credit, but the taxpayer must keep records necessary for the department to determine eligibility under this section including records establishing the person's status as a veteran and status as unemployed when hired by the taxpayer.
(7) No person may claim a credit against taxes due under both this chapter and chapter 82.16 RCW for the same qualified employee.
(8) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a)(i) "Qualified employee" means ((an unemployed))a veteran, spouse of a veteran, or spouse of an active duty military member who is employed in a permanent full-time position for at least two consecutive full calendar quarters. For seasonal employers, "qualified employee" also includes the equivalent of a full-time employee in work hours for two consecutive full calendar quarters.
(ii) For purposes of this subsection (8)(a), "full time" means a normal workweek of at least thirty-five hours.
(b) (("Unemployed" means that the veteran was unemployed as defined in RCW 50.04.310 for at least thirty days immediately preceding the date that the veteran was hired by the person claiming credit under this section for hiring the veteran.
(c))) "Veteran" means every person who has received an honorable discharge or received a general discharge under honorable conditions or is currently serving honorably, and who has served as a member in any branch of the armed forces of the United States, including the national guard and armed forces reserves.
(9) Credits allowed under this section can be earned for tax reporting periods through June 30, ((2022))2032. No credits can be claimed after June 30, ((2023))2033.
(10) This section expires July 1, ((2023))2033.
Sec. 3. RCW 82.16.0499 and 2015 3rd sp.s. c 6 s 1003 are each amended to read as follows:
(1) A person is allowed a credit against the tax due under this chapter as provided in this section. The credit equals twenty percent of wages and benefits paid to or on behalf of a qualified employee up to a maximum of ((one thousand five hundred dollars)):
(a) $1,500 for each qualified employee hired on or after October 1, 2016, but prior to July 1, 2022; or
(b) $3,000 for each qualified employee hired on or after July 1, 2022.
(2) No credit may be claimed under this section until a qualified employee has been employed for at least two consecutive full calendar quarters.
(3) Credits are available on a first-in-time basis. The department must keep a running total of all credits allowed under this section and RCW 82.04.4498 during each fiscal year. The department may not allow any credits that would cause the total credits allowed under this section and RCW 82.04.4498 to exceed ((five hundred thousand dollars))$5,000,000 in any fiscal year. If all or part of a claim for credit is disallowed under this subsection, the disallowed portion is carried over to the next fiscal year. However, the carryover into the next fiscal year is only permitted to the extent that the cap for the next fiscal year is not exceeded. Priority must be given to credits carried over from a previous fiscal year. The department must provide written notice to any person who has claimed tax credits in excess of the limitation in this subsection. The notice must indicate the amount of tax due and provide that the tax be paid within thirty days from the date of the notice. The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.
(4) The credit may be used against any tax due under this chapter, and may be carried over until used, except as provided in subsection (9) of this section. No refunds may be granted for credits under this section.
(5) If an employer discharges a qualified employee for whom the employer has claimed a credit under this section, the employer may not claim a new credit under this section for a period of one year from the date the qualified employee was discharged. However, this subsection (5) does not apply if the qualified employee was discharged for misconduct, as defined in RCW 50.04.294, connected with his or her work or discharged due to a felony or gross misdemeanor conviction, and the employer contemporaneously documents the reason for discharge.
(6) Credits earned under this section may be claimed only on returns filed electronically with the department using the department's online tax filing service or other method of electronic reporting as the department may authorize. No application is required to claim the credit, but the taxpayer must keep records necessary for the department to determine eligibility under this section including records establishing the person's status as a veteran and status as unemployed when hired by the taxpayer.
(7) No person may claim a credit against taxes due under both chapter 82.04 RCW and this chapter for the same qualified employee.
(8) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a)(i) "Qualified employee" means ((an unemployed))a veteran, spouse of a veteran, or spouse of an active duty military member who is employed in a permanent full-time position for at least two consecutive full calendar quarters. For seasonal employers, "qualified employee" also includes the equivalent of a full-time employee in work hours for two consecutive full calendar quarters.
(ii) For purposes of this subsection (8)(a), "full time" means a normal workweek of at least thirty-five hours.
(b) (("Unemployed" means that the veteran was unemployed as defined in RCW 50.04.310 for at least thirty days immediately preceding the date that the veteran was hired by the person claiming credit under this section for hiring the veteran.
(c))) "Veteran" means every person who has received an honorable discharge or received a general discharge under honorable conditions or is currently serving honorably, and who has served as a member in any branch of the armed forces of the United States, including the national guard and armed forces reserves.
(9) Credits allowed under this section can be earned for tax reporting periods through June 30, ((2022))2032. No credits can be claimed after June 30, ((2023))2033.
(10) This section expires July 1, ((2023))2033.
--- END ---