Credit—Income taxes due to another jurisdiction.

(1) A resident individual is allowed a credit against the tax imposed under this chapter for the amount of any income tax paid to another state, or political subdivision of the state, on income taxed under this chapter, subject to the following conditions, which must be imposed separately with respect to each taxing jurisdiction:(a) The credit is allowed only for taxes paid by the individual, or a pass-through entity in which the individual is an owner, to the other jurisdiction on net income from sources within that jurisdiction that is included in the individual's Washington base income; and(b) The amount of the credit may not exceed the smaller of:(i) The amount of tax paid to the other jurisdiction on net income from sources within the other jurisdiction; or(ii) The amount of tax due under this chapter before application of credits allowable by this chapter, multiplied by a fraction. The numerator of the fraction is the amount of the taxpayer's federal adjusted gross income subject to tax in the other jurisdiction. The denominator of the fraction is the taxpayer's total Washington base income. The fraction may never be greater than one.(2) If the laws of the other taxing jurisdiction contain a provision exempting a resident of this state from liability for the payment of income taxes on income earned for personal services performed in such jurisdiction, then the department may enter into a reciprocal agreement with such jurisdiction providing a similar tax exemption on income earned for personal services performed in this state.(3) The credit claimed under this section for a taxable year may not exceed the tax otherwise due under this chapter for that taxable year. Unused credit may not be carried forward or backward to another taxable year. No refunds may be granted for unused credit under this section.(4) For purposes of this section, "state" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, a federally recognized tribe, or any territory or possession of the United States.[ 2026 c 238 s 203.]Notes:Findings—Intent—Effect of invalidation of 2026 c 238 s 201—Automatic expiration date and tax preference performance statement exemption—Necessity of act—Intent—Implementation by department of revenue—2026 c 238: See notes following RCW 82A.04.030.