Washington Income Tax Calculator
Washington charges $0 in wage income tax — but it does levy a 7%–9.9% capital gains excise tax above a $278,000 threshold. This take-home pay calculator covers your federal tax, FICA, and a dedicated Washington capital gains tax estimator in one place.
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Washington Capital Gains Tax Estimator
If you sold stocks, bonds, or a business interest this year, this is the tax that actually applies to you in Washington — not a wage tax. Real estate, retirement accounts, and most small business sales are exempt.
Why Washington Has No Wage Income Tax (But Does Tax Capital Gains)
Washington is one of nine states with no personal wage income tax, and the reason traces back to a 1933 Washington Supreme Court ruling that interpreted the state constitution’s uniformity clause as barring a graduated income tax. Every attempt since to pass one by popular vote has failed, most recently and decisively in 2010. For a W-2 employee, this means your only payroll withholdings are federal income tax, Social Security, and Medicare — there is no Washington state line on your paycheck at all.
That changed in one specific way starting in 2022: Washington introduced a capital gains excise tax on the sale of long-term assets like stocks, bonds, and business interests. Lawmakers structured it deliberately as an excise tax on the privilege of selling an asset rather than a tax on income, and the Washington Supreme Court upheld that distinction in 2023, allowing the tax to survive a constitutional challenge that a true income tax would not have. For 2025, the tax applies a 7% rate to long-term capital gains above a $278,000 standard deduction (shared by married couples filing jointly), with a new 9.9% combined rate on the portion of gains exceeding $1 million, following a 2025 budget bill that added a 2.9% surcharge on top of the original 7% rate. Real estate sales, retirement account withdrawals, and most qualifying small business sales remain fully exempt.
Looking further ahead: a separate 2026 law (ESSB 6346) establishes Washington’s first true state income tax, a 9.9% rate scheduled to take effect January 1, 2028 — a development worth watching closely if you live in Washington or are considering relocating there, since it represents a genuine departure from the state’s longstanding no-income-tax identity.
Frequently Asked Questions
No. Washington’s constitution has been interpreted to prohibit a graduated personal income tax on wages, and multiple attempts to pass one have failed. Wage and salary income is taxed only at the federal level, plus Social Security and Medicare.
Yes, but only above a high threshold. Washington levies a 7% excise tax on long-term capital gains exceeding a $278,000 standard deduction (2025), with a 9.9% combined rate on gains above $1 million. It does not apply to wages, salaries, retirement accounts, or real estate sales.
Legally, no. The Washington Supreme Court ruled in 2023 that the capital gains levy is an excise tax on the privilege of selling an asset, not a tax on income, which is why it survived a constitutional challenge that a true income tax would not have.
A new law (ESSB 6346) enacted in 2026 establishes a 9.9% state income tax scheduled to take effect January 1, 2028, separate from the existing capital gains excise tax, though the framework and any further legal challenges may still affect its implementation.
No. Direct sales of real estate, including primary residences, rental properties, and commercial buildings, are fully exempt from Washington’s capital gains tax, regardless of the gain amount.
Primarily through one of the highest statewide sales tax rates in the country (6.5% state rate, often 9%-10% combined with local rates), the Business and Occupation (B&O) gross receipts tax on businesses, and property taxes.
Methodology: Calculations use the 2025 IRS federal tax brackets, standard deductions, and Child Tax Credit rules, plus 2025 Social Security (6.2% to the $176,100 wage base) and Medicare (1.45% + 0.9% additional Medicare tax) rates. Washington levies no state or local wage income tax. The capital gains estimator uses the 2025 Washington Department of Revenue framework: a $278,000 standard deduction, 7% on gains up to $1 million above that deduction, and a combined 9.9% rate on gains exceeding $1 million, per WA DOR guidance. It does not account for the qualified family-owned small business deduction, charitable deduction add-ons, or other exemptions; consult a tax professional for transactions above $278,000. This tool provides estimates for planning purposes only and is not tax, legal, or financial advice. Last reviewed for accuracy: June 2026.