Washington Administrative Code
Title 458 - Revenue, Department of
Chapter 458-57 - State of Washington Estate and Transfer Tax Reform Act rules
Section 458-57-135 - Washington estate tax return to be filed - Penalty for late filing - Interest on late payments - Waiver or cancellation of penalty - Application of payment
Current through Register Vol. 24-06, March 15, 2024
(1) Introduction. This rule applies to deaths occurring on or after May 17, 2005, and discusses the due date for filing of Washington's estate tax return and payment of the tax due. It explains that a penalty is imposed on the taxes due with the state return when the return is not filed on or before the due date, and that interest is imposed when the tax due is not paid by the due date. The rule also discusses the limited circumstances under which the law allows the department of revenue to cancel or waive the penalty, and the procedure for requesting that cancellation or waiver. The estate tax rule on the estate tax return etc., for deaths occurring on or before May 16, 2005, can be found in WAC 458-57-035.
(2) Estate tax return. The Washington state estate and transfer tax return and the instructions for completing the return can be found on the department's website at https://www.dor.wa.gov. They may also be requested by emailing estates@dor.wa.gov.
(3) Filing the state return-Payment of the tax due.
(4) The late filing penalty. If the state return is not filed by the due date, or any extension of the state return's due date, the person required to file the return may be subject to a late filing penalty.
A state return is due on February 3rd, in a common (non-leap) year, but is not filed until April 20th of the same year. The state return is delinquent starting with February 4th. The amount of tax due with the state return is $10,000.
Feb 4-Feb 28 $10,000 tax at 0.17857% × 25 days | $446.43 |
Mar 1-Mar 31 $10,000 tax at 5% per month | $500.00 |
Apr 1-Apr 20 $10,000 tax at 0.1667% x 20 days | $ 333.40 |
Total delinquent penalty due on April 20th filing date | $ 1,279.83 |
In this example, the first month (February) is a partial month. Since February would have twenty-eight days, the five percent monthly rate is divided by twenty-eight days to arrive at a daily rate of 0.0017857 (or 0.17857 percent). The daily rate is then multiplied by the twenty-five days of penalty accrual to arrive at the total percentage of penalty due for that portion of a month (0.0017857 x 25 days=.044643 or 4.4643 percent). The second calendar month (March) is complete and incurs the full five percent penalty. Since April has thirty days total, the five percent monthly rate is divided by the thirty days in April to arrive at a daily rate of .001667 (or 0.1667 percent). The daily rate is then multiplied by the twenty days of penalty accrual to arrive at the total percentage of penalty due for that portion of a month (0.001667 x 20 days=.03334 or 3.334 percent).
(5) Interest is imposed on late payment. The department is required by law to impose interest on the tax due with the state return if payment of the tax is not made on or before the due date. RCW 83.100.070. Interest applies to the delinquent tax only, and is calculated from the due date until the date of payment. Interest imposed for periods after January 1, 1997, will be computed at the annual variable interest rate described in RCW 82.32.050(2). Interest imposed for periods prior to January 2, 1997, will be computed at the rate of twelve percent per annum.
(6) Waiver or cancellation of penalties.RCW 83.100.-070(3) authorizes the department to waive or cancel the penalty for late filing of the state return under limited circumstances.
(7) Waiver or cancellation of interest. Title 83 RCW (Estate taxation) does not provide any circumstances that allow for waiver of the interest, even though penalty may be waived under limited circumstances (see subsection (6) of this section).
(8) Application of payment towards liability. The department will apply taxpayer payments first to interest, next to penalties, and then to the tax, without regard to any direction of the taxpayer.
Statutory Authority: RCW 83.100.047 and 83.100.200. 06-07-051, § 458-57-135, filed 3/9/06, effective 4/9/06.