Income Tax Contribution

See Section 207 in the full text of the InitiativeThe Income Tax Contribution is referred to as the Personal Health Assessment.

After a $15,000 exemption, there is a 1% Income Tax Contribution on Adjusted Gross Income (AGI).

AGI is based on either an individual's income or a married couple's income if they file jointly. See Adjusted Gross Income (AGI) for an IRS definition.

  • If you earn $15,000 or less, this tax will not apply.
  • If you earn more than $15,000, subtract the $15,000 from your AGI before calculating the tax.

The Income Tax Contribution is assessed annually and submitted with the federal tax return using a supplemental form of no more than two pages (section 218).

  • Employers must withhold the 1% contribution and provide employees with a year-end record of funds withheld.
    • This is calculated the same way your federal withholding is calculated for federal taxes.

Example A:

Gary makes $30,000 Gross Income per year and files individually.

  • After deductions his AGI is $27,000.
  • Subtracting the $15,000 exemption, the taxable amount is $12,000.
  • Multiplying that amount by 1% would be $120.
  • Gary's Income Contribution would be $120/year (or about $10/month would be withheld)

Example B:

Lashanna and Tim make $160,000 Gross Income per year and file jointly.

  • After deductions their AGI is $152,000.
  • Subtracting the $15,000 exemption, the taxable amount is $137,000.
  • Multiplying that amount by 1% would be $1,370.
  • Lashanna and Tim's Income Contribution would be $1,370/year (or about $114/month would be withheld)

More examples for illustration:

Adjusted Gross Income

Income Contribution

$20,000

$4/month or $48/year

$40,000

$21/month or $252/year

$60,000

$38/month or $456/year

$80,000

$54/month or $648/year

$100,000

$71/month or $850/year

Constitutionality

Regarding the constitutionality of a state income tax,  Article VII, section 1 of the Washington State Constitution states that all taxes must be uniform (that is, at the same rate for everyone), and the maximum exemption is $15,000. Lawyers have reviewed I-1600 and advised this is within the state constitution.

  • Additionally, Section 303 of the Initiative protects the remainder of the act if any provision of this act or application is found invalid.