A note before you book: please share only the names of the parties and a brief, non-confidential description of your issue. Confidential details should wait until we’ve completed a conflicts check and signed a written engagement agreement.
2028 illustration using fixed 2025 deduction amounts. This model uses the $278,000 capital gains standard deduction and $111,000 capital gains charitable-deduction cap for 2025. These are not the indexed 2028 amounts. Reconfirm the applicable year’s figures before relying on an estimate.
Select Unmarried for one individual or two unmarried people; select Married for spouses or registered domestic partners. Enter each person’s amounts separately. The model combines spouses’ amounts using one shared deduction and calculates unmarried people separately. Filing separately does not give spouses two income-tax deductions.
Washington State Tax Calculator: 2028 Illustration
This calculator illustrates the scheduled 9.9% income tax and the separate capital gains excise tax. The latter imposes 7% on taxable Washington capital gains, plus 2.9% on taxable Washington capital gains above $1 million. Section 205 provides a capped income-tax credit for capital gains tax.
Worked example
Using the fixed 2025 capital gains deduction of $278,000 as an illustrative assumption, a Washington resident in 2028 with $5,000,000 of long-term capital gain and no other income pays about $438,478 - entirely under the capital gains tax. The 9.9% income tax also reaches the gain, but the section 205 credit for capital gains tax paid offsets it to zero. Net result: you effectively pay the greater of the two regimes, not their sum.
This tool provides estimates only and is not legal or tax advice. Consult a qualified attorney or CPA for your situation.
How Washington's Income Tax Works Under ESSB 6346
Washington's Engrossed Substitute Senate Bill 6346 (ESSB 6346), signed into law on March 30, 2026, enacted a new individual income tax. The law imposes a 9.9% tax on income above a $1,000,000 standard deduction — $1,000,000 per individual, and a single $1,000,000 deduction is shared by married couples and registered domestic partners, regardless of whether they file jointly or separately — effective for the 2028 tax year. It is sometimes called the “millionaire tax.” Before ESSB 6346, Washington had no broad personal income tax — not on wages, business income, or investment income — relying instead on the sales tax and its capital gains excise tax. Whether the tax ever takes effect is now up to voters: Initiative 645, which would repeal ESSB 6346, qualified for the November 2026 ballot. Follow developments on my Initiative 645 Tracker.
Washington Income Tax Rates for 2026–2028
The income tax rate structure under ESSB 6346 is straightforward: income below the $1,000,000 threshold is taxed at 0%, and income above the threshold is taxed at 9.9%. For 2026 and 2027, no income tax applies — the 9.9% rate takes effect starting January 1, 2028. This two-year window gives high-income Washington residents time to plan, including considering Roth conversions, accelerating income, or revisiting their domicile situation before the tax kicks in.
Washington Capital Gains Tax Rates
Washington's capital gains excise tax (chapter 82.87 RCW), enacted in 2021 and upheld by the Washington Supreme Court in 2023, imposes 7% on net long-term capital gains above a standard deduction ($278,000 for tax year 2025, indexed annually; shared as a single combined deduction by a married couple), plus an additional 2.9% surtax on the portion above $1,000,000 — a 9.9% top marginal rate. ESSB 6346's 9.9% income tax does not stack on top of this. Although Section 302 returns long-term gains to the income tax base, Section 205 grants a nonrefundable credit for the capital gains tax paid (capped at the income tax otherwise due), so the same gain is not taxed twice. In practice, a resident pays the greater of the two regimes. The portion of qualified small business stock (QSBS) gain actually excluded under IRC Section 1202, and long-term real-estate gain exempt under RCW 82.87.050, fall outside both taxes. For the complete rules — exemptions, the standard deduction, QSBS interaction, and residency — see our full Washington capital gains tax guide.
How to Use This Washington Tax Calculator
- Choose marital status first. Registered domestic partners use Married. For one unmarried person, leave Person 2 blank.
- Enter each person’s federal AGI excluding long-term gains. Enter each amount only once.
- Enter total net long-term gains, including amounts you will identify separately as federally excluded QSBS gain or exempt long-term real-estate gain.
- Enter only the actual Section 1202 exclusion, not all proceeds or all potentially eligible gain. Enter an allowable capital gains charitable deduction, not the gross donation.
- Compare the capital gains tax, income tax before credit, credit, and combined total.
This is a simplified full-year-resident 2028 model using fixed 2025 capital gains deductions. It assumes Washington allocation of nonexempt gains and omits other state adjustments, the separate income-tax charitable deduction, other credits, PTE elections, QFOSB, and other exemptions. It does not calculate 2026 or 2027 tax, determine QSBS eligibility, or prepare a return.
Frequently Asked Questions About Washington State Taxes
Does Washington state have an income tax?
Washington enacted ESSB 6346 in 2026, with a 9.9% income tax scheduled to apply starting in tax year 2028 to Washington taxable income after a $1,000,000 deduction. Married couples and registered domestic partners share one deduction regardless of filing status. The new income tax does not apply to 2026 or 2027. The separate capital gains tax has a 7% base rate and an additional 2.9% rate above $1,000,000 of taxable Washington capital gains.
What is Washington's millionaire tax?
The “millionaire tax” is the 9.9% income tax enacted by ESSB 6346, scheduled to begin in 2028. The $1,000,000 deduction applies to Washington income after statutory adjustments, not simply gross receipts or unadjusted federal AGI. Section 302 removes federal long-term gains and adds back Washington gains subject to capital gains tax plus the standard capital gains deduction only for taxpayers owing that tax. Section 205 provides a nonrefundable credit for capital gains tax paid, capped at the income tax otherwise due.
What is the Washington state capital gains tax rate?
Washington's capital gains tax has a 7% base rate, plus 2.9% on taxable Washington capital gains exceeding $1,000,000. The standard deduction was $278,000 for 2025 and is indexed annually. From 2028, ESSB 6346 Section 205 allows a nonrefundable credit for capital gains tax paid, capped at income tax otherwise due; the rates should not simply be added together. This calculator illustrates that coordination using fixed 2025 capital gains deduction amounts.
What is ESSB 6346?
ESSB 6346 is the Engrossed Substitute Senate Bill 6346, signed into law by Governor Ferguson on March 30, 2026. It established a 9.9% individual income tax on income above a $1,000,000 standard deduction, effective in 2028, and coordinates with the existing capital gains excise tax through a nonrefundable credit (Section 205) so the same gain is not taxed under both.
Does the Washington capital gains tax apply to QSBS?
The portion of gain actually excluded under IRC Section 1202 is excluded from federal AGI and is outside both modeled Washington tax bases. The calculator does not establish eligibility or the allowable exclusion. A partial exclusion or gain above the applicable limit leaves a remaining amount to analyze.
When does Washington's income tax take effect?
Washington's new income tax under ESSB 6346 takes effect for the 2028 tax year. No state income tax applies for 2026 or 2027, though the existing 7% capital gains tax, plus its 2.9% surtax above $1,000,000 of taxable Washington capital gains, continues to apply to qualifying gains in those years. Planning before 2028 — such as accelerating income, relocating domicile, or maximizing QSBS exclusions — may reduce your total liability. Note that Initiative 645, on the November 2026 ballot, would repeal the tax before it takes effect — see the I-645 tracker for status.
How can I reduce my Washington state tax liability?
Strategies to reduce Washington state tax liability vary by situation and may include: maximizing QSBS exclusions under Section 1202, timing income realization before or after the 2028 effective date, Roth conversions in 2026 and 2027 while no income tax applies, structuring stock sales to stay below the capital gains threshold, and in some cases evaluating a change of domicile to another state. Each of these carries significant legal and tax complexity — consult a qualified attorney before making any decisions.
How does selling a home affect Washington capital gains tax?
Long-term real-estate gains exempt under RCW 82.87.050 are excluded from Washington capital gains tax. For a full-year resident, ESSB 6346 Section 302 also removes long-term gains included in federal AGI and does not add these exempt real-estate gains back. Accordingly, those gains do not themselves push the resident over the $1,000,000 income-tax deduction. Enter them separately in this calculator. Short-term gains, dealer income, and recapture treated as ordinary income require separate analysis and are not removed by the long-term-gain adjustment.
Do selling expenses and closing costs reduce my capital gains tax?
Capital gain generally reflects the amount realized, reduced by qualifying selling expenses and adjusted tax basis. The treatment of individual closing costs depends on the expense. Enter net long-term gain after the applicable costs and basis adjustments; the calculator then applies its stated deductions and the 7% capital gains rate plus the 2.9% surtax where applicable.
How does the QSBS exclusion work in the calculator?
Enter only the gain actually excluded under IRC Section 1202, not the entire sale proceeds or all gain from a potentially qualifying stock sale. Include that amount in the total gain input first, then enter it in the QSBS exclusion field. The calculator removes the entered exclusion from both modeled tax bases; it does not determine whether the stock, holding period, exclusion percentage, or remaining per-issuer limit qualifies.