Add WA state income tax reform

changelog.d/wa-income-tax.added.md

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+Added WA SSB 6346 reform: 9.9% income tax on high earners.

policyengine_us/parameters/gov/contrib/states/wa/sb6346/charitable_deduction/cap/individual.yaml

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+description: Washington limits the charitable contribution deduction to this amount per individual under the SSB 6346 reform.
+
+values:
+  2028-01-01: 100_000
+
+metadata:
+  unit: currency-USD
+  period: year
+  label: WA SSB 6346 charitable deduction cap (individual)
+  reference:
+    - title: SSB 6346, Sec. 307 - Charitable Contributions
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=21

policyengine_us/parameters/gov/contrib/states/wa/sb6346/charitable_deduction/cap/joint.yaml

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+description: Washington limits the combined charitable contribution deduction for married couples to this amount under the SSB 6346 reform.
+
+values:
+  2028-01-01: 100_000
+
+metadata:
+  unit: currency-USD
+  period: year
+  label: WA SSB 6346 charitable deduction cap (joint)
+  reference:
+    - title: SSB 6346, Sec. 307 - Charitable Contributions
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=21

policyengine_us/parameters/gov/contrib/states/wa/sb6346/in_effect.yaml

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+description: The Washington SSB 6346 income tax reform applies if this is true.
+
+values:
+  0000-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: WA SSB 6346 income tax reform in effect
+  reference:
+    - title: SSB 6346, 69th Legislature, 2025-2026
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=1

policyengine_us/parameters/gov/contrib/states/wa/sb6346/rate.yaml

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+description: Washington sets the income tax rate to this share under the SSB 6346 reform.
+
+values:
+  2028-01-01: 0.099
+
+metadata:
+  unit: /1
+  period: year
+  label: WA SSB 6346 income tax rate
+  reference:
+    - title: SSB 6346, Sec. 201(1) - Tax Imposed
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=16

policyengine_us/parameters/gov/contrib/states/wa/sb6346/standard_deduction/amount.yaml

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+description: Washington provides this amount as the standard deduction under the SSB 6346 reform.
+
+values:
+  2028-01-01: 1_000_000
+
+metadata:
+  unit: currency-USD
+  period: year
+  label: WA SSB 6346 standard deduction
+  uprating: gov.bls.cpi.cpi_u
+  # Sec. 312 specifies Seattle-area CPI-U for indexing starting Oct 2029
+  # (for tax year 2030). Using national CPI-U as a proxy until we add
+  # Seattle-area CPI data. Fixed at $1M for 2028-2029.
+  rounding:
+    type: nearest
+    interval: 1000
+  reference:
+    - title: SSB 6346, Sec. 310 - Standard Deduction
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=22
+    - title: SSB 6346, Sec. 312 - Inflation Adjustment
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=23

policyengine_us/parameters/gov/contrib/states/wa/sb6346/wftc/min_age.yaml

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+description: Minimum age for WFTC eligibility under SSB 6346, for individuals who do not meet the federal EITC age requirement.
+
+values:
+  2028-01-01: 18
+
+metadata:
+  unit: year
+  period: year
+  label: SSB 6346 WFTC minimum age for expanded eligibility
+  reference:
+    - title: SSB 6346, Sec. 901(2)(a)(ii)(C)
+      href: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=52

policyengine_us/reforms/reforms.py

@@ -177,6 +177,9 @@
 from .congress.watca import (
     create_watca_reform,
 )
+from .states.wa.sb6346.sb6346 import (
+    create_wa_sb6346_reform,
+)
 
 
 from .states.ga.sb520 import (
@@ -346,6 +349,7 @@ def create_structural_reforms_from_parameters(parameters, period):
     ct_hb5009 = create_ct_hb5009_reform(parameters, period)
     ga_sb520 = create_ga_sb520_reform(parameters, period)
     watca = create_watca_reform(parameters, period)
+    wa_sb6346 = create_wa_sb6346_reform(parameters, period)
 
     reforms = [
         afa_reform,
@@ -428,6 +432,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         ct_tax_rebate_2026,
         ga_sb520,
         watca,
+        wa_sb6346,
     ]
     reforms = tuple(filter(lambda x: x is not None, reforms))
 

policyengine_us/reforms/states/wa/sb6346/__init__.py

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+from .sb6346 import create_wa_sb6346_reform, wa_sb6346

policyengine_us/reforms/states/wa/sb6346/sb6346.py

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+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+
+
+def create_wa_sb6346() -> Reform:
+    """
+    WA SSB 6346 - 9.9% income tax on high earners.
+
+    Imposes a 9.9% tax on Washington taxable income (federal AGI minus
+    a $1M standard deduction and capped charitable deduction).
+
+    Reference: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf
+    """
+
+    class wa_income_tax_base_income(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Washington base income under SSB 6346"
+        unit = USD
+        definition_period = YEAR
+        reference = "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=17"
+        defined_for = StateCode.WA
+
+        def formula(tax_unit, period, parameters):
+            return tax_unit("adjusted_gross_income", period)
+
+    class wa_income_tax_charitable_deduction(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Washington income tax charitable deduction under SSB 6346"
+        unit = USD
+        definition_period = YEAR
+        reference = "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=21"
+        defined_for = StateCode.WA
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.contrib.states.wa.sb6346.charitable_deduction.cap
+            filing_status = tax_unit("filing_status", period)
+            charitable = add(
+                tax_unit,
+                period,
+                ["charitable_cash_donations", "charitable_non_cash_donations"],
+            )
+            is_joint = filing_status == filing_status.possible_values.JOINT
+            cap = where(is_joint, p.joint, p.individual)
+            return min_(charitable, cap)
+
+    class wa_income_tax_standard_deduction(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Washington income tax standard deduction under SSB 6346"
+        unit = USD
+        definition_period = YEAR
+        reference = "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=22"
+        defined_for = StateCode.WA
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.contrib.states.wa.sb6346.standard_deduction
+            return p.amount
+
+    class wa_income_tax_taxable_income(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Washington taxable income under SSB 6346"
+        unit = USD
+        definition_period = YEAR
+        reference = (
+            "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=21",
+            "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=22",
+        )
+        defined_for = StateCode.WA
+
+        def formula(tax_unit, period, parameters):
+            base_income = tax_unit("wa_income_tax_base_income", period)
+            charitable_deduction = tax_unit(
+                "wa_income_tax_charitable_deduction", period
+            )
+            standard_deduction = tax_unit("wa_income_tax_standard_deduction", period)
+            return max_(base_income - charitable_deduction - standard_deduction, 0)
+
+    class wa_income_tax(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Washington income tax"
+        unit = USD
+        definition_period = YEAR
+        reference = "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=16"
+        defined_for = StateCode.WA
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.contrib.states.wa.sb6346
+            taxable_income = tax_unit("wa_income_tax_taxable_income", period)
+            sb6346_tax = taxable_income * p.rate
+            capital_gains_tax = tax_unit("wa_capital_gains_tax", period)
+            refundable_credits = tax_unit("wa_refundable_credits", period)
+            return sb6346_tax + capital_gains_tax - refundable_credits
+
+    class wa_working_families_tax_credit(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Washington Working Families Tax Credit"
+        unit = USD
+        definition_period = YEAR
+        reference = (
+            "https://app.leg.wa.gov/RCW/default.aspx?cite=82.08.0206",
+            "https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/6346-S.pdf#page=52",
+        )
+        defined_for = StateCode.WA
+
+        def formula(tax_unit, period, parameters):
+            eitc = tax_unit("eitc", period)
+            eitc_eligible = eitc > 0
+            # SSB 6346 Sec. 901(2)(a)(ii)(C): individuals who do not meet
+            # the EITC age requirement but are at least age 18.
+            sb6346_p = parameters(period).gov.contrib.states.wa.sb6346.wftc
+            age_head = tax_unit("age_head", period)
+            age_spouse = tax_unit("age_spouse", period)
+            filer_at_least_min_age = (age_head >= sb6346_p.min_age) | (
+                age_spouse >= sb6346_p.min_age
+            )
+            earned_income = tax_unit("filer_adjusted_earnings", period)
+            has_earned_income = earned_income > 0
+            eligible = eitc_eligible | (filer_at_least_min_age & has_earned_income)
+            p = parameters(
+                period
+            ).gov.states.wa.tax.income.credits.working_families_tax_credit
+            eitc_child_count = tax_unit("eitc_child_count", period)
+            max_amount = p.amount.calc(eitc_child_count)
+            eitc_agi_limit = tax_unit("eitc_agi_limit", period)
+            phase_out_start_reduction = p.phase_out.start_below_eitc.calc(
+                eitc_child_count
+            )
+            phase_out_start = eitc_agi_limit - phase_out_start_reduction
+            phase_out_rate = (max_amount - p.min_amount) / phase_out_start_reduction
+            excess = max_(0, earned_income - phase_out_start)
+            reduction = max_(0, excess * phase_out_rate)
+            phased_out_amount = max_amount - reduction
+            amount_if_eligible = where(
+                phased_out_amount > 0,
+                max_(p.min_amount, phased_out_amount),
+                0,
+            )
+            return amount_if_eligible * eligible
+
+    class reform(Reform):
+        def apply(self):
+            self.add_variable(wa_income_tax_base_income)
+            self.add_variable(wa_income_tax_charitable_deduction)
+            self.add_variable(wa_income_tax_standard_deduction)
+            self.add_variable(wa_income_tax_taxable_income)
+            self.update_variable(wa_income_tax)
+            self.update_variable(wa_working_families_tax_credit)
+
+    return reform
+
+
+def create_wa_sb6346_reform(parameters, period, bypass=False):
+    if bypass:
+        return create_wa_sb6346()
+
+    p = parameters.gov.contrib.states.wa.sb6346
+
+    reform_active = False
+    current_period = period_(period)
+
+    for _ in range(5):
+        if p(current_period).in_effect:
+            reform_active = True
+            break
+        current_period = current_period.offset(1, "year")
+
+    if reform_active:
+        return create_wa_sb6346()
+    else:
+        return None
+
+
+wa_sb6346 = create_wa_sb6346_reform(None, None, bypass=True)