No personal income tax through December 31, 2027 (and pending 2028 9.9% income tax regime)
Washington does not impose a personal income tax on residents or nonresidents for tax years through December 31, 2027. The state has no individual income tax filing requirement, no withholding on wages, and no tax on wages, salaries, investment income, retirement distributions, or other forms of personal income during this period.
Source: Washington Department of Revenue – Income Tax
The absence of a personal income tax is codified by statute. RCW 1.90.100 (Initiative 2111, enacted in 2024) provides: "Neither the state nor any county, city, or other local jurisdiction in the state of Washington may tax any individual person on any form of personal income."
Source: RCW 1.90.100
Washington’s constitutional bar on graduated income taxes stems from Culliton v. Chase (1933), where the state Supreme Court found that income is property for constitutional purposes, barring non-uniform income taxes under the state’s uniformity clause.
Pending personal income tax regime for 2028 and later; legal uncertainty remains
On March 30, 2026, Governor Bob Ferguson signed Engrossed Substitute Senate Bill 6346 into law, establishing a 9.9% tax on household income above $1 million, effective January 1, 2028. However, two legal proceedings affect the law’s fate:
- Referendum challenge resolved: On May 4, 2026, in Heywood v. Hobbs, the Washington Supreme Court barred a referendum from the 2026 ballot, holding the act’s “emergency clause” placed the law outside the referendum process. The order did NOT address the law’s constitutionality.
Source: Heywood v. Hobbs, Order (Wash. Supreme Ct., May 4, 2026)
- Constitutional challenge pending: A lawsuit was filed April 9, 2026, in Klickitat County Superior Court, arguing the tax violates the state’s uniformity clause (the principle from Culliton v. Chase). As of June 15, 2026, that action remains pending, and the effective date of the 2028 tax could be enjoined or struck down depending on the litigation outcome.
Source: Klickitat County Superior Court Civil Dockets (ESSB 6346 challenge, pending as of 2026-06-15)
Not yet human confirmed. Litigation outcome could affect the January 1, 2028, effective date. Practitioners should monitor case developments before advising on 2028 and later years.
Annual return filing requirements and due dates for tax years 2028 and later
Taxpayers who owe Washington personal income tax must file an annual return on or before the filing date of their federal income tax return—April 15 for calendar-year taxpayers. Individuals who owe no tax are not required to file a return. The tax must be paid by electronic funds transfer or other forms of electronic payment authorized by the Department of Revenue; the department may waive the electronic payment requirement for good cause.
Source: ESSB 6346, § 301(1)–(3), Chapter 238, Laws of 2026
Estimated tax payments will be required under rules aligned with federal estimated tax payment requirements, but no estimated payments are required before July 1, 2029. Section 501 of ESSB 6346 imposes an underpayment penalty on taxpayers who fail to make sufficient estimated payments during the tax year; the penalty is calculated as interest on the shortfall. The Department of Revenue is authorized to establish payment schedules, safe harbor thresholds, and administrative procedures for estimated payments.
Source: ESSB 6346, § 501, Chapter 238, Laws of 2026
The first annual returns and first payments under the new tax are due in April 2029 for tax year 2028.
Not yet human confirmed. The Department of Revenue has not yet issued implementing regulations or administrative guidance on return forms, filing procedures, or estimated payment mechanics. Practitioners should monitor DOR rulemaking.
Tax rate and income threshold for 2028 and later years
Beginning January 1, 2028, Washington imposes a 9.9% tax on Washington taxable income exceeding $1,000,000 per household. The tax is applied only to income above the threshold; the first $1,000,000 of Washington taxable income is not taxed. The standard deduction is indexed for inflation beginning with tax year 2030.
Source: ESSB 6346, § 201 and § 316, Chapter 238, Laws of 2026
Calculation of Washington taxable income for 2028 and later years
Washington taxable income is calculated in two steps. First, the taxpayer starts with federal adjusted gross income (Internal Revenue Code § 62) and applies Washington-specific modifications in sections 302 through 313 of the act to arrive at "Washington base income." These modifications exclude long-term capital gains (§ 302), add back state and local income taxes and B&O and public utility taxes (§ 304), and adjust for other items including out-of-state municipal bond interest (§ 303) and charitable contributions (§ 309). Second, the taxpayer subtracts a $1,000,000 standard deduction per household (§ 314) to arrive at Washington taxable income.
Who qualifies as a Washington resident for tax years 2028 and later
An individual is a Washington resident under either of two tests. First, a person domiciled in Washington during the taxable year is a resident—unless all three conditions of the 30-day safe harbor are met: (1) no permanent place of abode in Washington during the entire year, (2) a permanent place of abode outside Washington for the entire year, and (3) 30 or fewer days of physical presence in Washington during the year. Second, even if not domiciled in Washington, an individual who maintains a place of abode in Washington and is physically present in the state for more than 183 days during the year is a resident.
Nonresident employment compensation sourcing and five-day safe harbor for 2028 and later years
Beginning January 1, 2028, nonresident individuals are subject to Washington personal income tax only on income derived from sources within Washington. For employment compensation, the general sourcing rule allocates wages and other compensation to Washington to the extent the services giving rise to that compensation are performed within the state, regardless of the employer's commercial domicile location.
Source: ESSB 6346, § 401(2)(a), Chapter 238, Laws of 2026
Day-count apportionment for multi-state employment
When a nonresident employee performs services both within and outside Washington, the compensation is apportioned based on the ratio of days worked in Washington to total days worked. The Department of Revenue may approve another reasonable apportionment method in appropriate circumstances.
Source: ESSB 6346, § 403(1), Chapter 238, Laws of 2026
Five-day de minimis safe harbor
A nonresident who performs services in Washington for five or fewer days cumulatively during a calendar year is not required to allocate any income from those services to Washington. This safe harbor does not apply to nonresident professional athletes, student athletes, or entertainers, who are subject to separate apportionment rules under sections 404 and 407 of the act.
Source: ESSB 6346, § 401(3), Chapter 238, Laws of 2026
No convenience-of-the-employer rule
Washington did not adopt a convenience-of-the-employer rule. A nonresident working remotely from another state for a Washington-based employer owes no Washington tax on compensation for services performed outside the state, even if the employee could have performed the work in Washington. Only services physically performed in Washington are sourced to the state under the statute.
The five-day threshold is measured on a calendar-year basis, not a tax-year basis. A nonresident who visits a Washington office for six days in a calendar year must allocate compensation for the days worked in Washington (subject to apportionment under section 403), but a nonresident who visits for five or fewer days reports zero Washington-source employment income for that year, regardless of total compensation level.
Not yet human confirmed. The Department of Revenue has not yet issued implementing regulations on apportionment methodology, day-count mechanics, or the interaction between the five-day safe harbor and the day-ratio apportionment rule. Practitioners advising nonresidents with Washington business travel should monitor DOR guidance.
Interaction between Long-Term Capital Gains Exclusion and Capital-Gains Excise Tax
In Washington, the 2025 law ESSB 6346 establishes a 9.90% personal income tax on “Washington taxable income,” effective for tax year 2028 (taxes due in 2029). Critically, Section 302 of ESSB 6346 modifies federal adjusted gross income by excluding all long-term capital gains and losses—then adding back only the net long-term capital gains that are subject to the state’s separate capital-gains excise tax, along with the related standard deduction under RCW 82.87.060(1).
Consequently, long-term capital gains are not double-taxed. Instead, they are removed from Washington base income (on which the 9.90% income tax applies) and instead are taxed only under RCW 82.87.040 at rates of 7%, with an additional 2.90% on gains exceeding $1,000,000 beginning in 2025.
Further, ESSB 6346 Section 205 provides a nonrefundable credit—starting in tax year 2028, for taxes due in 2029—against the 9.90% income tax for the amount of capital-gains excise tax paid on Washington capital gains in the same year. The credit is limited to the income tax liability and may not be carried forward or refunded.
In practice, a taxpayer with both ordinary income and long-term capital gains (above $1M) will:
- Pay the capital-gains excise tax on LTCG (7% on first $1M plus 2.90% on the excess).
- Pay the 9.90% income tax on Washington taxable income composed solely of ordinary income (federal AGI with LTCG removed per Section 302).
- Receive a nonrefundable credit against the income tax equal to the capital-gains excise tax paid (Section 205), up to the amount of income tax owed.
Thus, LTCG are taxed only once—via the excise tax—and are not subject to duplication under the income tax regime, although the income tax credit mechanism safeguards residual overlap. This structure is mandatory under statute and fully backed by the legislative text—no additional administrative guidance is required for understanding the mechanics, though practitioners should monitor future DOR guidance for implementation specifics.
Source: ESSB 6346, Chapter 238, Laws of 2026, § 302, § 205 (statute text and official PDF) Source: RCW 82.87.040 (capital-gains excise tax rates)
Not yet human confirmed. The statutory provisions clearly outline the interaction, but review is advised to ensure no recent administrative updates or regulatory clarifications affect the practical application of the credit or exclusion.
Credit mechanics and limitations (refundability, carryforward, and offset rules) for personal income and capital gains taxes
Capital gains excise tax credit mechanics — refundability and timing
For tax years 2025 and later, Washington allows a credit against the capital gains excise tax for any Washington B&O (Business & Occupation) tax paid with respect to the same sale or exchange that generated the capital gain. According to the Department of Revenue, this B&O tax credit is explicitly nonrefundable. The credit can only be used to offset the capital gains excise tax due for the same tax year in which the B&O tax was paid; there is no carryforward or carryback provision. Any excess credit that exceeds the capital gains tax liability in that year is lost and cannot be applied to future or prior years.
Source: Washington Department of Revenue — Capital Gains Excise Tax Guidance
Credits for income and excise taxes paid to other jurisdictions
Washington’s capital gains excise tax statute and DOR guidance also recognize a credit for “any legally imposed income or excise tax paid to another jurisdiction on the same capital gains” (generally, another state’s capital gains or income tax). The law and official DOR guidance do not specify whether this credit is refundable or nonrefundable, nor do they provide for any carryforward or carryback. Based on standard statutory construction and the wording of DOR’s published material, the amount of such credit appears to be limited to the current year’s Washington capital gains excise tax liability and must be claimed in the year the other-state tax was paid. There is no evidence in the primary authority that the credit is refundable or that it may offset Washington taxes attributable to income from other categories (unrelated to the taxed gain).
Source: Washington Department of Revenue — Capital Gains Excise Tax Guidance
No cross-category or unrestricted offset
The structure of Washington’s credit provision ties each credit (whether from B&O tax or other-state income/excise tax) to the specific capital gain or transaction taxed. There is no indication in the statute or official DOR resources that the credit is permitted to offset other categories of Washington tax liability unrelated to the transaction or gain giving rise to the credit. No carryforward or carryback of unused credit is authorized by the statutes or official guidance as of June 15, 2026.
Not yet human confirmed. The statute and official DOR pages are silent on several details (notably the refundability and carryforward/back of other-state tax credits). Practitioners with fact patterns near these edges should monitor DOR regulations and future administrative guidance.
30-day safe harbor: all-or-nothing annual test or part-year relief?
Washington’s personal income tax law, effective January 1, 2028, includes a 30-day safe harbor that allows certain domiciliaries to escape resident status if they satisfy three conditions throughout the tax year: (1) they did not maintain a permanent place of abode in Washington during the entire taxable year, (2) they maintained a permanent place of abode outside Washington for the entire taxable year, and (3) they were present in Washington for no more than 30 days in the entire taxable year.
Direct answer: The 30-day domiciliary safe harbor in Washington’s ESSB 6346 is an all-or-nothing annual test. If a taxpayer meets all three safe-harbor requirements for the entire taxable year, they are treated as a nonresident for the full year. The statute does not provide for part-year or pro-rata allocation of resident status for domiciliaries; the safe harbor applies to the entire year or not at all.
Why:
- The statute’s definition of resident refers to individuals "domiciled in this state during the taxable year" unless all three conditions are met for “the entire taxable year.” The phrase "entire taxable year" appears in both relevant prongs (abode maintenance and presence days), indicating the safe harbor is not a partial-year exception.
- Although ESSB 6346 Section 101(8)(c) addresses part-year residency, it provides that an individual is a resident for the portion of the year in which the individual was domiciled or maintained an abode in the state. However, this part-year provision operates only where the safe harbor is not met, and an individual otherwise falls under the 183-day/abode test. When applying the 30-day safe harbor, it is an annual test; part-year escape is not authorized by the safe harbor statute.
Source support: Authority Source: ESSB 6346, Section 101(8), codified at RCW 82.87.020(11)(a), (c) (2028): sees “during the entire taxable year” and “all three conditions.”
Source: ESSB 6346, Section 101(8), RCW 82.87.020
Caution / review status: Not yet human confirmed. The Department of Revenue has not issued administrative rules interpreting the safe-harbor timing provisions as of June 15, 2026. Practitioners should monitor DOR’s implementation guidance.
Part-year resident apportionment for tax years 2028 and later under ESSB 6346
A part-year resident under ESSB 6346 for tax years beginning January 1, 2028, has Washington adjusted gross income (AGI) determined using a prorated approach:
- For the portion of the year in which the individual was a Washington resident, include the individual's entire federal adjusted gross income in Washington AGI.
- For the portion of the year in which the individual was a nonresident, include only the individual's adjusted gross income derived from Washington sources, as defined and apportioned under sections 403–405 and 407 of ESSB 6346.
Specifically, Sec. 406(1) provides:
> “Except as provided in subsection (2) of this section, the adjusted gross income of a part-year resident is the sum of the following: > (a) For the portion of the year in which the taxpayer was a resident of Washington, the taxpayer's entire adjusted gross income; and > (b) For the portion of the year in which the taxpayer was a nonresident, the taxpayer's adjusted gross income derived from sources within this state, as provided in sections 403 through 405 and 407 of this act.” > Source: ESSB 6346 Sec. 406(1)
Special rules apply when the taxpayer’s federal AGI includes items from a pass-through entity. Per Sec. 406(2), such AGI items must be prorated using the ratio of residency days to the entity’s tax year days, split between (a) all items during residency days, and (b) only Washington-source items during nonresident days:
> “The portion of adjusted gross income of a part-year resident with federal adjusted gross income that includes an item of income, gain, loss, deduction, or credit from a pass-through entity must include the sum of… > (a) The total amount of the item… multiplied by the ratio of the number of days the taxpayer was a resident of Washington during the tax year of the entity over the total number of days in the tax year of the entity; and > (b) The total amount of the item… derived from or connected with sources within this state… multiplied by the ratio of the number of days the taxpayer was a nonresident of Washington during the tax year of the entity over the total number of days in the tax year of the entity.” > Source: ESSB 6346 Sec. 406(2)
There is no statutory provision treating part-year residents as owing tax on their full year’s worldwide income; instead, ESSB 6346 explicitly apportions income based on residency status and source during the year as set forth above. There is likewise no administrative regulation or guidance yet issued by DOR extending or modifying this statutory scheme.
In effect, a part-year resident owes tax on (1) all income earned while a resident, plus (2) only Washington-source income while a nonresident, with additional proration rules for pass-through entity items.
Source: ESSB 6346, sections 406(1) and 406(2)
Not yet human confirmed.
Mechanics of the credit for income taxes paid to other states (2028 and later)
Direct answer: Washington’s new personal income tax (effective 2028) provides a dollar-for-dollar, nonrefundable credit for income taxes paid to other states or local jurisdictions, but only to the extent that the same income is taxed by both Washington and the other jurisdiction. The credit is subject to strict limitations: it cannot exceed the Washington tax on the doubly taxed income, must be calculated separately for each jurisdiction, and is not refundable or eligible for carryforward or carryback.
Why:
- ESSB 6346 section 315(1) and (2) establish that a resident individual may claim a credit for income tax “legally imposed by another state or political subdivision of a state on income derived from sources within that other jurisdiction and included in Washington base income.”
- The amount of credit allowed is limited to the lesser of:
- The tax actually paid to the other jurisdiction on that portion of income; or
- The Washington income tax before credits, multiplied by the ratio of (federal AGI sourced and taxed in the other jurisdiction as included in Washington base income) to (total Washington base income) — with the ratio capped at 1.
- The credit is nonrefundable, has no carryforward or carryback, and cannot offset Washington tax attributable to income taxed only by Washington. It must be claimed for the year the other-state tax was paid.
- There is an explicit sourcing limitation: credit is permitted only if the income is both subject to the other jurisdiction’s tax and is also included in Washington base income for that year.
Source support: Authority source: ESSB 6346, section 315 (2026), Chapter 238, Laws of 2026. See full text: https://lawfilesext.leg.wa.gov/biennium/2025-26/Htm/Bills/Session%20Laws/Senate/6346-S.SL.htm (scroll to section 315). As of June 15, 2026, the Department of Revenue has NOT issued administrative rules or Q&As providing additional interpretation or calculation worksheets for the credit. This summary describes the statutory operation only.
Source: ESSB 6346 § 315, Chapter 238, Laws of 2026
Caution / review status: Not yet human confirmed. No DOR regulations or official guidance on computation or documentation requirements as of June 15, 2026. Practitioners should monitor DOR rulemaking for further details on practical application and filing procedures.
Statute of limitations for assessment and collection of Washington personal income tax (2028 and later)
Direct answer: For tax years beginning January 1, 2028, the statute of limitations for assessment of Washington personal income tax under ESSB 6346 is generally four years after the return was filed, not including extensions. This period applies to both assessments and collection unless exceptions override.
Why: Section 511 of ESSB 6346 (enrolled as Chapter 238, Laws of 2026) provides that the Washington Department of Revenue may not assess or collect any tax due under the personal income tax title more than four years after a return was filed, except as provided for substantial understatements, failure to file, or fraud. This is not the same as the federal three-year IRC § 6501 limitation—Washington uses a four-year rule with its own exceptions.
- If a taxpayer omits more than 25% of the income required to be reported, the assessment period is extended to six years after the return was filed (Section 511(2)).
- If a return is false or fraudulent, or no return is filed, there is no limitation on assessment or collection (Section 511(3)).
- Refund claims must generally be filed within four years after the original tax was due or paid, whichever is later (Section 512).
These periods run from the date the return was filed, or the due date if filed early. Amended returns and additional assessments each receive their own four-year limitation.
Source support: Primary authority for these limitation periods is found in ESSB 6346, Section 511 (statute text). As of June 15, 2026, the Department of Revenue has not issued further administrative rules on these exact periods, but the statute is self-contained and prescriptive.
Source: ESSB 6346, § 511, Chapter 238, Laws of 2026
Caution / review status: Not yet human confirmed. DOR has not published regulations further interpreting limitation period mechanics or interaction with other administrative relief as of June 15, 2026. Practitioners should monitor DOR rulemaking for any changes or further exceptions.
Coordination and exclusivity: Washington capital gains tax and 2028 income tax regime under ESSB 6346
Direct answer: For tax years 2028 and later, the Washington capital gains excise tax and the new 9.9% personal income tax established by ESSB 6346 are exclusive but coordinated via statutory mechanisms to prevent double taxation of long-term capital gains. Capital gains are subject only to the excise tax (RCW 82.87) and excluded from the new personal income tax base, except to the extent of overlap addressed by a statutory credit.
Why:
- Exclusion of long-term capital gains from personal income tax base: Section 302 of ESSB 6346 requires taxpayers to remove all long-term capital gains and losses from federal adjusted gross income when calculating "Washington base income" for personal income tax purposes. Only net long-term capital gains taxed under the capital gains excise tax (RCW 82.87.040) are then added back, and only to the extent permitted by statute.
- Use of credit to eliminate double taxation: Section 205 of ESSB 6346 provides a nonrefundable credit against the new 9.9% personal income tax for the amount of Washington capital gains excise tax paid on gains for the same year. The credit is limited to the amount of income tax owed and is not refundable or carried forward.
- Result: Long-term capital gains are taxed only under the capital gains excise tax at 7% (and, for gains above $1 million, an extra 2.9%), and are not subject to the new personal income tax regime. If any overlap arises from statutory or administrative nuance, the credit structure guarantees that taxpayers are not doubly taxed on the same dollar of gain.
- No administrative DOR regulations yet issued: As of June 17, 2026, no Washington Department of Revenue regulations further interpreting this relationship have been promulgated; the regime derives directly from statutory text.
Source support: Authority: ESSB 6346, sections 205 and 302 (exclusion and credit, as enacted); RCW 82.87.040 (capital gains excise tax rates).
Caution / review status: Not yet human confirmed. Only statutory text has been published as of June 17, 2026. Taxpayers with novel or edge-case fact patterns should monitor for future DOR guidance or regulatory interpretation as the regime is implemented.
Definition of 'household' and standard deduction application: spouses, partners, and non-traditional living situations under ESSB 6346 (2028 and later)
As of July 9, 2026, ESSB 6346 does not provide a statutory definition of 'household' for purposes of the $1,000,000 standard deduction and 9.9% tax threshold under the new Washington personal income tax effective for tax years beginning January 1, 2028.
The only explicit rule is that married couples and state-registered domestic partners are jointly subject to a single $1,000,000 standard deduction per couple, regardless of whether they file joint or separate returns. The deduction is expressly capped at $1 million in the aggregate, and allocation between spouses or partners is to follow community property principles unless the Department of Revenue adopts another method by rule.
ESSB 6346 is silent regarding unrelated persons, cohabiting but unmarried couples, multi-family arrangements, or other non-traditional living situations. No statutory text defines 'household' beyond the explicit treatment of spouses and registered partners, and there is no incorporation of federal or other state definitions.
As of this date, the Washington Department of Revenue has not issued regulations, bulletins, or formal guidance interpreting or expanding the definition of 'household' for the standard deduction or threshold provisions. There is no DOR-published procedure clarifying whether or how unrelated adults living together, cohabiting couples not married or registered, or multi-family co-occupants are grouped for filing or deduction purposes. Practitioners should monitor future DOR rulemaking and administrative guidance for definitions or rules addressing non-traditional households. Until then, only the explicit statutory framework for spouses and domestic partners is operative under ESSB 6346.
Source: ESSB 6346, §§ 201(d), 314(2), Chapter 238, Laws of 2026
No personal income tax if ESSB 6346 is invalidated—no backup regime for 2028 and later
If the pending constitutional challenge to ESSB 6346 succeeds and the law is struck down by a court of final jurisdiction, Washington will revert to its regime of no state personal income tax for tax years 2028 and later. There are no backup statutory provisions or alternative personal income tax mechanisms authorized to take effect in the event ESSB 6346 is invalidated.
Nullification clause in ESSB 6346 Section 1102 of ESSB 6346 provides that if a court of final jurisdiction invalidates section 201 (the operative section imposing the personal income tax), then "this act is null and void in its entirety." This means all provisions of ESSB 6346—including implementing rules, definitions, and tax mechanisms—would be rendered legally inoperative. The legislature did not include a fallback or contingent tax regime.
Statutory and constitutional bar restored If ESSB 6346 is struck down and no new law is enacted, Washington state resumes its longstanding framework of no personal income tax, as embodied by RCW 1.90.100 and longstanding constitutional interpretation in Culliton v. Chase (1933). Local jurisdictions are also barred from enacting personal income taxes by statute.
Direct answer: Washington will have no personal income tax for the affected years if ESSB 6346 is invalidated. The state will not collect a personal income tax for tax year 2028 or later unless the legislature enacts new legislation that survives constitutional challenge.
Source: ESSB 6346, Section 1102 Source: RCW 1.90.100
Not yet human confirmed. As of June 17, 2026, no alternative state personal income tax regime is on the books or pending as substitute legislation. Practitioners should monitor future legislative activity and the outcome of litigation challenging ESSB 6346.