Washington state income tax: 9.9% over $1 million from 2028
A Washington state income tax of 9.9% on income over $1 million is set to start in 2028. Initiative 645 on the November 3 ballot would repeal it first.
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- Washington tax
- income tax
- Initiative 645
- multi-state tax
- ballot measures
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Washington has no state income tax in 2026, and it does not tax wages. A 2026 law, ESSB 6346, adds a 9.9% tax on income above $1 million a year, starting January 1, 2028.
Two things could stop it first. Initiative 645, on the November 3, 2026 ballot, would repeal it, and a lawsuit argues it breaks the state constitution. Unless your income could top $1 million in 2028 or later, it would not tax you.
| Law | ESSB 6346, signed March 30, 2026 |
|---|---|
| Rate | 9.9% of income above the deduction |
| Deduction | $1 million, one per married couple |
| Starts | January 1, 2028 |
| Ballot | Initiative 645 would repeal it |
| Court | Lawsuit pending in Klickitat County |
| Status on October 9, 2026 | Law, not yet in effect |
Does Washington state have a state income tax?
No, Washington does not tax wages or other income in 2026 or 2027. A 2024 law bans taxes on personal income, and the 2026 law exempts only its own tax from that ban.
Washington does tax large long-term gains. Its capital gains tax is 7% of gains above a yearly deduction, plus 2.9% on gains above $1 million. Legally it is an excise tax, not an income tax.
What is Washington's new millionaires' tax?
It is a flat 9.9% tax on Washington taxable income above a $1 million standard deduction. Here is how it works as written.
- What it taxes. It starts from federal adjusted gross income (AGI), with Washington changes. Wages, bonuses, RSU income, business income, interest, dividends and short-term gains all count.
- The rate. The 9.9% applies only above the deduction. A single resident with $1.4 million of wages would owe 9.9% of $400,000, or $39,600.
- The deduction. It is $1 million per person. Spouses and registered domestic partners share one, even on separate returns. Inflation adjustments begin in October 2029.
- Charitable gifts. Up to $100,000 per household is deductible, for gifts to charities principally managed in Washington.
- Who pays. Residents pay on all their income. Nonresidents pay only on income from Washington sources.
- Filing. Returns are due with your federal return, from April 2029. Estimated payments are not required before July 1, 2029.
Who would pay the 9.9% tax, and from when?
Residents with over $1 million of Washington taxable income in 2028 or a later year would pay it. Income received before January 1, 2028 is outside the tax.
Do I owe it if I move out of Washington before 2028?
Mostly not, if the move is real. A nonresident pays only on Washington-source income, such as pay for days worked there or Washington rent. A nonresident's dividends, interest and stock gains are generally not Washington income.
Residency follows your domicile, your permanent home. Keeping a home in Washington and spending more than 183 days there also makes you a resident.
Two catches remain. First, pay is taxed where you did the work, by days worked. So RSUs that vest after you leave could still be partly Washington income.
Second, a nonresident does not get the full $1 million deduction. It shrinks to the Washington share of total income. Say your 2028 federal AGI is $2 million, and $400,000 of it is Washington pay. Your deduction would be $200,000, so Washington would tax $200,000, for $19,800.
What is Initiative 645, and what happens if it passes?
Initiative 645 is a citizen initiative that would repeal the 9.9% tax before it starts. On the ballot it is Initiative Measure No. IP26-645. It would also ban any state or local tax on, or measured by, individual income.
If voters approve it on November 3, 2026, it would take effect December 3, 2026. The 2026 law's sales tax exemptions, B&O tax cuts and Working Families Tax Credit expansion would stay. If it fails, the tax stays on course for 2028, unless a court strikes it down.
Is Washington's income tax being challenged in court?
Yes. Ten plaintiffs, including farm, builder and small business groups, sued the state in Klickitat County Superior Court on April 9, 2026. They argue that income is property, so the constitution requires a uniform tax of no more than 1%.
The court had not ruled as of October 9, 2026. If the courts finally strike down the tax, the law says its tax relief falls with it.
Does the new tax replace the capital gains tax?
No, both would apply from 2028, but a credit stops the same gain from being taxed twice. Long-term gains taxed by the capital gains tax also count toward the income tax, and that tax is credited against it.
As written, a resident with no other credits pays whichever of the two taxes is larger. With $900,000 of wages and a $600,000 long-term stock gain, the total would be $49,500. That is 9.9% of the $500,000 above $1 million.
When would the tax start?
It would apply to income received from January 1, 2028, if it survives the vote and the lawsuit.
| Date | What happens |
|---|---|
| October 16, 2026 | Ballots are mailed by this date |
| November 3, 2026 | Election Day for Initiative 645 |
| December 3, 2026 | Initiative 645 would take effect, if approved |
| January 1, 2028 | The 9.9% tax begins, if still law |
| April 2029 | First returns and payments due |
| July 1, 2029 | Estimated payments can first be required |
What should you do now?
- Work from current law. Washington does not tax income received in 2026 or 2027.
- If you can time a bonus, an option exercise or a short-term gain, income received before 2028 is outside the tax.
- If you plan to leave Washington anyway, moving before 2028 keeps your dividends, interest and stock gains out of it.
- Keep a record of your Washington workdays, for RSUs that vest after a move.
- Married couples should plan on one $1 million deduction, not two.
- We will update this page with the November 3 result and any court ruling.
For returns in more than one state, see our multi-state tax service.
Sources.
- Washington Legislature, ESSB 6346, Chapter 238, Laws of 2026, as signed
- Chapter 82A.04 RCW, the codified income tax
- RCW 1.90.100, the ban on personal income taxes
- RCW 82.87.040, capital gains tax rates
- Washington Department of Revenue, income tax
- Washington Secretary of State, measures certified for November 3, 2026 (August 21, 2026)
- Ballot title and explanatory statement for IP26-645, by the Attorney General
- Office of Financial Management, fiscal impact statement for Initiative 645
- House Office of Program Research, summary of Initiative 26-645
- Klickitat County, case information for Petter v. State, No. 26-2-00073-20