Washington’s capital gains tax is 7% of your taxable long-term gains, and 9.9% of the part over $1 million.
RCW 82.87 taxes individuals who sell stock and other assets they held more than a year. A standard deduction comes off the year’s gains first, and the rest is taxed as an excise on the sale.
Updated · Sources
Long-term gains sold in 2025
- 7%
- is the rate on your first $1 million of taxable gains, as it has been since the tax began in 2022.
- 9.9%
- is the rate on taxable gains above $1 million, the 7% plus 2.9% added from 2025.
- $278,000
- is the standard deduction, which is adjusted for inflation each year.
The rates are the same for 2026. The Department of Revenue publishes the 2026 deduction by October 31, 2026, and by law it cannot be lower than $278,000.
Do you owe Washington’s long-term capital gains tax?
For stock, crypto and other financial assets, Washington’s tax applies to a year’s sales only when all four of these are true.
You are domiciled in Washington on the sale date
For stock and other intangible assets, Washington looks only at where you are domiciled on the day you sell. Art and other tangible property are taxed if they are in Washington when sold, wherever you live.
You held the asset more than one year
Washington taxes only long-term gains, so you owe it nothing in 2026 on stock you held one year or less. For RSU shares, the year starts when the shares are delivered. Your gain is the sale price above their value that day.
The asset is not exempt
All real estate is exempt, so selling a house or a rental brings no Washington capital gains tax. The seller usually still pays Washington’s real estate excise tax. Sales inside a 401(k), IRA or other retirement account are exempt too.
Your gains are above the standard deduction
If your long-term gains for the year fall under the deduction, Washington’s tax is zero. No return is due unless you made a payment or asked for an extension. A married couple or registered domestic partners get one deduction between them, even on separate returns.
A business never pays Washington’s capital gains tax itself. If you own part of a partnership, LLC, S corporation or grantor trust, you pay on your share of its long-term gains.
How much is Washington’s tax on a large stock sale?
$500,000 gain
$15,540
Only the $222,000 above the deduction is taxed, all of it at 7%. That is 3.1% of the gain.
$1,500,000 gain
$91,978
The 9.9% rate reaches only the $222,000 above $1,278,000. The tax is 6.1% of the gain.
$3,000,000 gain
$240,478
Of the $2,722,000 taxed, $1,722,000 is taxed at 9.9%. The tax is 8.0% of the gain.
$10,000,000 gain
$933,478
The tax is 9.3% of the gain, close to the 9.9% top rate.
Each figure subtracts the 2025 standard deduction of $278,000 from the gain. The first $1 million of what is left is taxed at 7%, and the rest at 9.9%, under RCW 82.87.040. Federal tax is separate and not shown.
How does Washington’s tax compare with federal tax in 2026?
Washington’s tax on a long-term gain is owed on top of the federal tax on the same gain.
| Washington | Federal | |
|---|---|---|
| Wages and RSU income | No income tax | 10% to 37% Plus Social Security and Medicare |
| Short-term gains | Not taxed | 10% to 37% The same rates as wages, plus the 3.8% NIIT at higher incomes |
| Long-term gains | 7% or 9.9% 9.9% on taxable gains over $1M | 0%, 15% or 20% Plus the 3.8% net investment income tax at higher incomes |
| Selling your home | No capital gains tax Real estate excise tax still applies | Up to $250,000 of gain excluded $500,000 for a qualifying married couple |
| When you pay | By the federal due date Usually April 15, with no quarterly payments | Through the year By withholding or estimated payments |
Washington’s tax on 2026 gains is due April 15, 2027. From October 15, 2026, you can prepay it on My DOR, the Department of Revenue’s online account site.
How can you legally avoid Washington’s capital gains tax?
Spread large sales over two tax years
The standard deduction and the $1 million line apply to each year’s gains. Selling over two years can use two deductions and keep more of the gain out of the 9.9% rate.
Sell qualified small business stock (QSBS)
Washington does not tax gain that Section 1202 excludes from your federal return. Any gain the federal exclusion does not cover is taxed as usual.
Give to a Washington charity in the same year
For 2025, gifts to Washington charities above a separate $278,000 gift threshold were deductible, up to $111,000. That saves at most $10,989. Only charities that qualify for a federal deduction and are principally directed and managed in Washington count. An unused deduction cannot be carried to another year.
Offset gains with long-term losses
Washington taxes your net long-term gain, so a long-term loss on stock reduces it. Short-term losses do not count. Neither does a loss on real estate or another exempt sale.
Change your domicile before you sell
Washington does not tax gain on stock you sell after your domicile has moved to another state. You must prove the move. From January 1, 2026, brokers send the state copies of Form 1099-B for long-term sales allocated to Washington. If your broker still has a Washington address for you, the state presumes the sale is Washington’s until you show otherwise.
A CPA can plan Washington’s tax before you sell, and file the return after.
Valim’s CPAs help tech employees and founders in Washington plan stock sales around the capital gains tax, and file the returns that follow.
- We prepare your Washington capital gains return with your federal return, and take out the sales Washington does not tax.
- We work out your Washington and federal tax both ways: selling in one year, or spreading the sales over two.
- We plan the estimated payments for a large gain, including any Washington prepayment.
- We plan a move out of Washington before a sale, and the records that prove your new domicile.
- We answer any Department of Revenue or IRS letter about a return we prepared, and your fee already covers it.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
Washington capital gains tax questions.
Does Washington have an income tax now?
No, Washington has no individual income tax in 2026, so it does not tax wages or RSU income. Its capital gains tax is an excise tax on sales, not an income tax. A 2026 law, ESSB 6346, adds a 9.9% tax on income above a $1 million deduction from January 1, 2028. Initiative 26-645, on the November 3, 2026 ballot, would repeal that tax before it begins.
What is Washington’s capital gains tax rate in 2026?
Washington taxes long-term capital gains at 7% in 2026, and at 9.9% on the part of your taxable gains above $1 million. The 9.9% is the 7% plus an extra 2.9%, which began with 2025 sales. Both rates apply after the standard deduction. For 2025, with no other deductions, the 9.9% began once your non-exempt long-term gains passed $1,278,000. The $1 million threshold does not rise with inflation, and a married couple gets one $1 million threshold, not two.
What is Washington’s capital gains standard deduction?
Washington’s capital gains standard deduction is $278,000 for 2025, the latest amount the Department of Revenue has published. Spouses and registered domestic partners share one deduction, even if they file separately. If your long-term gains are below it, you owe nothing. You need not file unless you made a payment or requested an extension.
What is exempt: real estate, retirement accounts?
Real estate and retirement accounts are both exempt from Washington’s capital gains tax. The real estate exemption covers every kind of real estate, residential or commercial, however long you owned it. Selling a stake in a private company that owns real estate directly is exempt only for the real estate share of the gain. The retirement exemption covers assets held in a 401(k), 403(b), 457(b), IRA, Roth IRA or pension plan. Depreciable business property, timber, qualifying livestock and commercial fishing privileges are exempt too.
Do I owe it if I move out of Washington before selling?
No, Washington’s capital gains tax does not apply to stock or other intangible assets you sell after your domicile has left Washington. Washington presumes your domicile continues until you prove a move, with physical presence in the new state and intent to stay. Planning to move later does not change your domicile, and selling your Washington home does not prove the move on its own.
What is the capital gains tax in Washington state?
Washington’s capital gains tax is an excise tax that individuals pay when they sell long-term capital assets, such as stock or crypto. It is 7% of taxable gains, and 9.9% of the part over $1 million. It took effect on January 1, 2022, and the state Supreme Court upheld it in 2023, in Quinn v. State. The US Supreme Court declined to review that ruling in January 2024. Later in 2024, voters rejected Initiative 2109, which would have repealed it.
How much capital gains tax on $300,000?
Washington’s tax on a $300,000 long-term gain in 2025 was $1,540, with no other gains or deductions. That is 7% of the $22,000 left after the $278,000 standard deduction, which a married couple shares. Federal tax on long-term gains is 0%, 15% or 20% in both 2025 and 2026, depending on your taxable income. The 3.8% net investment income tax can apply too, above $200,000 of modified AGI ($250,000 joint).
How does capital gains tax work in WA?
Washington’s tax starts from your federal net long-term capital gain, recomputed without some federal rules, such as opportunity zone deferral. You take out exempt sales and stock sold while domiciled elsewhere, then subtract the standard deduction. The rest is taxed at 7%, and the part above $1 million at 9.9%. You file online with the Department of Revenue by the federal due date, and quarterly payments are not required.
Will the Washington capital gains tax exemption be changed in 2026?
The standard deduction, often called the exemption, is adjusted each October for Seattle-area inflation, and by law it never goes down. The Department of Revenue must publish the 2026 amount by October 31, 2026. It will be at least the $278,000 set for 2025. Under current law, the 7% and 9.9% rates and the $1 million line stay the same for 2026.
Sources
- Chapter 82.87 RCW, Capital gains tax (with notes, including the 2025 finding on the 2024 repeal vote)
- WAC 458-20-301, Capital gains excise tax: definitions, deductions, exemptions, and allocation of gains and losses
- Washington Department of Revenue, Frequently asked questions about Washington’s capital gains tax
- Washington Department of Revenue, Do you owe capital gains tax? (deduction amounts by year)
- Washington Department of Revenue, New tiered rates for Washington’s capital gains tax
- Washington Department of Revenue, New documentation requirement for sales or exchanges of long-term capital assets
- Washington Supreme Court, Quinn v. State, No. 100769-8 (March 24, 2023)
- Supreme Court of the United States, Quinn v. Washington, No. 23-171 (petition denied January 16, 2024)
- Washington Department of Revenue, Real estate excise tax
- Washington ESSB 6346, Chapter 238, Laws of 2026 (individual income over $1 million)
- Washington House Office of Program Research, Summary of Initiative 26-645 (August 21, 2026)
- 26 U.S.C. § 121, Exclusion of gain from sale of principal residence
- 26 CFR 1.83-4, Holding period, basis of property, and deduction
- 26 U.S.C. § 1411, Imposition of tax (net investment income tax)
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
Reviewed and updated September 2026. General information, not advice for your situation.