Key Tax Facts: Washington
- No state income tax on wages or salaries
- 7% capital gains excise tax above ~$278,000; 9.9% on gains over $1M (2025)
- Long-Term Care Trust Act imposes 0.58% payroll tax
- Business & Occupation (B&O) tax applies to gross receipts
Estimate Your 2025 Federal Income Tax
Washington State Income Tax Overview
Washington has no state income tax on wages, salaries, or retirement income, which makes it attractive to workers and retirees - but it comes with an important nuance. Since 2022 Washington has levied a capital gains excise tax on large long-term investment gains: 7% on gains above an inflation-adjusted annual deduction (about $278,000 in 2025), rising to 9.9% on gains exceeding $1 million. The tax, upheld by the Washington Supreme Court in 2023, exempts most people - it does not touch wages, retirement accounts, or the sale of your home - but high earners with large investment gains are affected, and a separate high-earner income tax has been enacted to begin in 2028, so the picture continues to evolve. Washington funds its government largely through one of the higher combined sales tax rates in the country, around 9%, plus a business gross-receipts tax (the B&O tax) instead of a corporate income tax. Property taxes are moderate. Washington does levy a state estate tax, with a $3 million exemption and rates up to 35% - among the highest in the nation - so larger estates need planning. For a typical resident earning $100,000 in wages, the state income tax bill is still $0, versus roughly $6,000 or more in neighboring Oregon or California. Federal income tax applies to all taxable income using the same nationwide brackets.
What Is Different About Washington for Taxpayers
Deductions and exemptions
Washington has no tax on wages, salaries, pensions, or ordinary income, so there is no state return or deduction for most residents. Since 2022 the state levies a 7% capital gains excise tax on long-term gains above a standard deduction of about $270,000, with real estate and retirement accounts excluded, and added a 2.9% surcharge on gains above $1 million starting in 2025.
Credits worth knowing
Washington's Working Families Tax Credit pays up to $1,290 to low-income households that would qualify for the federal earned income credit, claimed through the Department of Revenue rather than on an income tax return. The state has no general income tax credits because it has no general income tax.
Retirement, capital gains, and other income
Social Security, pensions, 401(k) and IRA distributions, and dividends are untaxed. The capital gains tax exempts retirement accounts and real estate, so it mainly affects large sales of stock or business interests. Washington's combined sales tax averages over 9%.
Rules summarized from the Washington State Department of Revenue guidance for tax year 2025. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Washington Has No State Income Tax
Washington has no state income tax. The state has one of the highest sales tax rates in the country and recently introduced a capital gains tax.
As a Washington resident, your state income tax is $0. The calculator above estimates your federal income tax, which applies to all U.S. residents regardless of state.
Where Washington Stands Among the 50 States
Washington is one of 9 states with no tax on wage income (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Of the other 41 states, 14 use a flat rate and 27 use graduated brackets, with a median top rate of 5.2%.
On sales tax the picture is different: Washington's combined state and average local rate of 9.38% ranks #4 of 50, against a national median of 7.00%. That is the trade-off for skipping an income tax: Washington leans harder on consumption taxes.
Washington State Tax at Five Income Levels (2025, single filer)
| Taxable income | Washington tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $0 | 0.00% | 0% |
| $65,000 | $0 | 0.00% | 0% |
| $100,000 | $0 | 0.00% | 0% |
| $150,000 | $0 | 0.00% | 0% |
| $250,000 | $0 | 0.00% | 0% |
Brackets applied directly to the taxable-income figure shown, before Washington-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Washington vs. Its Neighbors on $75,000 of Taxable Income
A Washington resident with $75,000 of taxable income pays about $0 in state income tax. Of Washington's 2 neighboring states, 0 would tax that income less and 2 would tax it more -- Washington is the cheapest state in its region on this measure.
Frequently Asked Questions -- Washington Income Tax
Does Washington have a state income tax?
No. Washington does not impose a broad-based state income tax on wages, salaries, or most personal income. Washington has no state income tax. The state has one of the highest sales tax rates in the country and recently introduced a capital gains tax.
Do I still owe federal income tax as a Washington resident?
Yes. Federal income tax applies to all U.S. residents regardless of state. Washington residents pay the same federal tax brackets as everyone else -- only your state income tax is $0.
What taxes do Washington residents pay instead of income tax?
Washington has no state income tax on wages, salaries, or retirement income, which makes it attractive to workers and retirees - but it comes with an important nuance. Since 2022 Washington has levied a capital gains excise tax on large long-term investment gains: 7% on gains above an inflation-adjusted annual deduction (about $278,000 in 2025), ri...
How much does living in Washington save compared with neighboring states?
On $75,000 of taxable income a Washington resident pays $0 in state income tax, while Idaho would collect $3,975, Oregon would collect $6,254. Sales tax in Washington is 9.38%, ranked #4 of 50.
Do I need to file a Washington state tax return?
Washington does not require a personal income tax return for most residents. You must still file a federal return with the IRS. Check the Washington State Department of Revenue for any state-specific obligations that may apply.
What is the sales tax rate in Washington?
Washington's combined state and average local sales tax rate is 9.38%. States without an income tax typically lean more on sales, excise, or property taxes to fund government services -- use our sales tax calculator to see how that adds up.
Understanding Your Washington Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Washington state tax -- which for residents here is $0. Washington has no state filing requirement for personal income; you only file the federal return. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Combined Sales + Income Tax Picture
Washington's combined state-plus-average-local sales tax rate is 9.38%. States without an income tax typically lean more heavily on sales, excise, or property taxes to fund government services -- worth factoring in alongside the $0 income tax figure above. Use our sales tax calculator to see how that adds up on a purchase.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Washington State Department of Revenue or a qualified tax professional for guidance specific to your situation.