Update — April 2026: Governor Ferguson signed ESSB 6346 into law on March 30, 2026. The analysis below remains accurate under the enrolled bill text: the tax takes effect January 1, 2028, first returns and first payments are due in April 2029, and individual estimated payments are not required before July 1, 2029 (Section 501(6)). The same floor of July 1, 2029 applies to electing pass-through entities under Section 502(4)(d) — the two dates are identical. A constitutional challenge is pending, and a repeal initiative (IP26-645) was certified for the November 3, 2026 ballot on July 15, 2026 (Initiative 645), but neither currently affects the enacted timeline.
If Washington’s new millionaire tax takes effect on January 1, 2028, when would the first payment actually be due? When would estimated taxes begin? And what would taxpayers need to do to avoid underpayment penalties?
For the full breakdown of the tax — rates, credits, QSBS treatment, and planning — see Washington’s New Income Tax: What Founders, Investors, Athletes, and High Earners Need to Know.
The short answer is this:
The tax would start on January 1, 2028.
The first return and first payment would generally be due in April 2029.
Required estimated tax payments would not begin before July 1, 2029.
That timing matters more than most people realize. Because if this bill becomes law, 2028 would be the first tax year, but both the cash-payment and estimated-tax regimes would not begin until 2029.
New guide: Washington State Tax Planning Guide for High Earners — https://www.thestartuplawblog.com/washington-tax-guide/
This post is part of our Complete Guide to Washington's New Income Tax.
Status of the bill
ESSB 6346 was signed into law by Governor Ferguson on March 30, 2026. The tax takes effect January 1, 2028. A constitutional challenge is pending in Klickitat County Superior Court. The Washington Supreme Court rejected the referendum petition on May 4, 2026 (Heywood v. Hobbs), and Let's Go Washington has since submitted 511,408 signatures for a repeal initiative (IP26-645) certified for the November 3, 2026 ballot (Initiative 645). Neither has affected the enacted timeline as of August 24, 2026.
What the bill would do
Washington's new personal income tax (ESSB 6346) would impose a tax beginning January 1, 2028 on an individual’s Washington taxable income. The rate would be 9.90%. The bill defines “Washington taxable income” as Washington base income further modified by the bill’s state-specific rules, and it starts from federal adjusted gross income rather than simply taxing gross income over a threshold.
Important point:
This is not best understood as a casual “9.9% tax on everything over $1 million.” The actual tax base is Washington taxable income, as defined in the bill.
The bill’s statement of intent says the tax is meant to apply to households with annual adjusted gross income of $1,000,000 or more.
The rollout timeline
January 1, 2028: the tax begins
The bill states that, beginning January 1, 2028, a tax is imposed on the receipt of Washington taxable income, and only individuals are subject to payment of the tax. That means 2028 would be the first year in which liability could arise.
Practical translation: A Washington resident could be generating exposure during 2028 even though no Washington estimated payments would yet be required.
April 2029: first return, first payment
The bill provides that taxpayers owing tax under the new chapter must file their Washington return on or before the date their federal income tax return is required to be filed. It also says the tax must be paid by that filing date regardless of any filing extension. For a calendar-year individual, that means the first Washington return and first payment for tax year 2028 would generally be due around April 15, 2029.
No Washington estimated tax payment would generally be required during 2028 itself. The first real payment event would usually be with the 2028 return in 2029.
Estimated taxes: not in 2028
The bill says each individual with estimated tax above $5,000 who is required under the Internal Revenue Code to make estimated payments must pay Washington estimated tax. It also incorporates the Internal Revenue Code rules for the timing of reporting periods and payment due dates. But then it adds a transition rule: Estimated payments are not required before July 1, 2029. So for tax year 2028, there would be no required Washington estimated payments during 2028.
When would the first estimated payment likely be due?
The statute incorporates federal estimated-tax reporting periods and due dates, while barring required estimates before July 1, 2029. A September 2029 installment is therefore a reasonable transition expectation, subject to DOR implementation. September 15, 2029 falls on a Saturday; do not treat the unadjusted date as a final deadline. Check the applicable weekend and holiday adjustments and DOR instructions. See §501.
Planning timeline: January 1, 2028 — tax begins. April 2029 — first annual return and payment, subject to applicable deadline adjustments. No required estimates before July 1, 2029. A September 2029 installment is a planning expectation, with the actual transition deadline to be confirmed.
The underpayment rules
The estimated-tax penalty protection uses 90% of the current return’s tax or 100% of the most recently filed return’s tax. A 2028 return may already have been filed when estimates begin in 2029. Keep that protection separate from the federal §6654 calculation referenced in §501(4). Section 501(1) applies to individuals with estimated Washington tax exceeding $5,000 who must make federal estimates; subsection (3) separately addresses annualized tax below $5,000.
Plain English: Once estimates start, the usual safe move is to make sure you have paid in at least 90% of this year’s tax or 100% of last year’s tax.
What is the penalty?
The bill applies Washington’s general penalty framework to underpayments of estimated tax. It also adds a specific rule providing that if total estimated tax payments for the year are “substantially underpaid,” there is a 5% penalty on the amount of the underpaid tax.
Another key point: This would not just be an annual-return issue. Once estimates begin, underpaying during the year could create a separate penalty problem.
Why this matters
The headline “tax starts in 2028” is true, but incomplete.
The more useful framing is this: Liability would begin in 2028. The first check would generally be due in April 2029, and the estimated-tax regime would begin later that same year.
That matters for residency planning, liquidity planning, bonus and withholding strategy, pass-through entity planning, transaction timing, and general cash-flow management.
For founders, executives, investors, and business owners with uneven income, that timing may become one of the most important practical features of the bill. That last point is an inference from the bill’s structure, not express statutory language.
Bottom line
If ESSB 6346 becomes law in its current form:
- January 1, 2028 — tax begins
- April 2029 — first return and first payment
- No required estimated payments before July 1, 2029
- Likely first regular installment after the moratorium: September 2029, with the exact deadline subject to applicable calendar adjustments and DOR transition instructions.
- Safe harbor: 90% of current-year tax or 100% of prior-year tax
Suggested disclaimer
This post describes ESSB 6346 as enacted on March 30, 2026. It is not legal or tax advice. Administrative guidance from the Washington Department of Revenue may affect implementation details. The pending constitutional challenge and the repeal initiative (IP26-645) could affect the tax’s ultimate effect.
For a comprehensive planning guide, see the Washington State Tax Planning Guide for High Earners ($49.99).
Related: For a comprehensive overview of Washington State tax planning strategies — including QSBS, entity structuring, domicile planning, and the 2026–2028 planning window — see our complete guide: Washington State Income Tax Planning Guide for High Earners.
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