What is the Washington state income tax rate in 2026?
Washington has no state income tax in 2026: wages, pensions, IRA and 401(k) withdrawals, Social Security, interest and dividends are not taxed by the state (Washington Department of Revenue; rules). Instead it levies an excise of 7% on long-term capital gains above $278,000 a year, plus 2.9% on the part above $1,000,000; gains inside IRAs and 401(k)s and on real estate are outside it (Washington State Legislature; rules). Example: a married couple, both 70, with $40,000 of Social Security, a $30,000 private pension and $30,000 of IRA withdrawals ($100,000 in all; the pension and IRA money split evenly between them) owes $0 of Washington tax and $5,087 of federal tax; a single 62-year-old with $24,000 of Social Security, an $18,000 pension and $18,000 of IRA withdrawals ($60,000 in all) owes $0 to the state and $4,111 federal. If the same couple also sells stock at a $400,000 long-term gain, the excise is $8,540.
For retirees the bill that remains is federal: the sample couple's $5,087 is the federal income tax on the same income (Rev. Proc. 2025-32). All nine states with no income tax, compared.
Local income taxes: none in Washington. The local income taxes the tax engine computes for 2026 are in Delaware, Indiana, Iowa, Kentucky, Maryland, Michigan, Missouri, New York, Ohio, Oregon and Pennsylvania.
Your whole 2026 return in Washington, federal and state together, ends in a refund or an amount owed: 2026 tax return calculator (free) → What five typical retiree households owe or get back in Washington and every other state: the 2026 tax return study.
Figures for 2026 from QuantCalc’s open tax engine (federal 2.6.1, state 1.28.0), for a full-year resident. An estimate, not tax advice: credits, itemized deductions and rules this page does not ask about change a real return. Every Washington rule with its official sources: Washington rules and sources.
In QuantCalc's 51-state planner study — one married couple, both 60, $2M, $80,000 a year to spend after tax, 10,000 paths per jurisdiction — the median path in Washington pays $162,597 of federal and state income tax and Medicare IRMAA over 30 years, with no Washington state income tax in any year. That ranks #1 of 51 (tied with 15 others) by lifetime tax (1 = lowest). The plan succeeds in 84.05% of paths. No state income tax means the Roth-conversion optimization is purely federal + ACA cliff.
The WA verdict
For a retiree planning withdrawals in 2026, Washington is one of the most retirement-tax-friendly states in the U.S. No income tax, but a 7% capital gains tax on long-term gains above the $278,000 standard deduction (2025), rising to 9.9% on gains over $1 million, and an estate tax exclusion of at least $3 million (2026). Sources: WA DOR: capital gains tax · WA DOR: tiered capital gains rates from 2025 · WA DOR: estate tax tables.
Since there is no state income tax, both pre-tax 401(k) distributions and Roth conversions cost $0 in state tax. That removes one variable from the optimization, but it does not eliminate the federal ACA cliff — your premium tax credit still depends on federal MAGI.
Worked example: $30k Roth conversion in Washington
Consider a married couple age 58 in Washington with $75,000 of wages (their MAGI), both on ACA Marketplace coverage. They want to convert $30,000 from a traditional IRA to a Roth. In Washington, the state tax on that conversion is $0 (no state income tax). But the conversion pushes their MAGI to $105,000 — over the 400% FPL cliff of $84,600. The $3,600 of federal income tax the conversion adds (the whole conversion is taxed in the federal 12% bracket) plus the whole premium tax credit they would have had at $75,000 ($21,814 a year at Washington's average benchmark Silver premium), the total cost of converting $30,000 is $25,414 — an effective 84.7% marginal rate. The lesson: in tax-free states, the ACA cliff IS the optimization, not state tax.
Cost breakdown
| Component | Amount |
|---|---|
| Federal income tax (12% bracket) | $3,600 |
| Washington state income tax | $0 |
| ACA premium tax credit clawback | $21,814 |
| Total cost on $30,000 conversion | $25,414 (84.7% effective) |
Scenario B (tax-free): $100k rip-the-bandage conversion in Washington
A retired couple in Washington aged 62 with $60,000 of Social Security and a $1.4M traditional IRA is past the ACA cliff and is no longer on Marketplace coverage. They convert $100,000 in a single 'rip the bandage' year. Federal income tax added by the conversion: $15,560 (the conversion also makes $51,000 more of their Social Security taxable, $32,200 of the added income fills deductions their Social Security left unused and the rest is taxed in the federal 10%–22% brackets). Washington state tax: $0. Effective cost on the $100,000 conversion: $15,560, or 15.6%. In a no-state-income-tax state, the post-cliff playbook is to convert aggressively in low-spend years rather than dripping small amounts.
What the planner's Monte Carlo says about Washington
QuantCalc Research ran one married couple through QuantCalc's retirement planner in each of the 51 jurisdictions: both 60, $2,000,000 ($1,400,000 traditional, $600,000 Roth), a 60/40 portfolio, $80,000 a year to spend after tax for 30 years, no Social Security, 10,000 paths each. The planner's federal and state tax engines price every year, and it picks the withdrawals and Roth conversions. Here is Washington beside the lowest- and highest-tax results:
| Metric | Washington | No state tax (16 jurisdictions) | Oregon (highest) |
|---|---|---|---|
| Median lifetime tax, federal + state + IRMAA (30y) | $162,597 | $162,597 | $309,718 |
| State income tax (30y, sum of yearly medians) | $0 | $0 | $146,914 |
| State income tax in the first year (age 60) | $0 | $0 | $5,838 |
| 30-year success rate | 84.05% | 84.05% | 80.61% |
| Median balance at 90 | $2,153,150 | $2,153,150 | $1,801,272 |
| Rank by lifetime tax (of 51, 1 = lowest) | #1 | #1 | #51 |
Across all 51 jurisdictions the success rate runs from 80.61% to 84.05%: for this couple the state changes the tax bill far more than the odds of the money lasting. Dollars are today's dollars. Source: QuantCalc 51-State Retirement Monte Carlo (v2026.3, re-run 2026-10-12) — 510,000 planner paths, methodology and dataset released CC-BY-4.0. Every jurisdiction's row uses the same household and the same market paths; only the state of residence changes.
How Washington treats capital gains in retirement
Washington has no state income tax on wages or ordinary investment income, but a state capital-gains tax applies to realized LTCG above the standard deduction ($278,000 for 2025, the latest the Department of Revenue has published): 7% on the first $1 million of taxable gains and 9.9% above that from tax year 2025 (enacted 2021, upheld by the state supreme court in 2023).
Why the ACA cliff hits hard in Washington
The 400% federal-poverty-level cliff is federal, not state-specific — but its dollar impact depends on the benchmark Silver-plan premium in your county. Washington's Marketplace pricing and your household composition determine the size of the subsidy at risk. A couple aged 58 with MAGI of exactly $84,600 still has $20,858 a year of premium tax credit at Washington's average benchmark Silver premium, and all of it is on the line. With the 2021–2025 enhanced credit expired, $1 of additional MAGI above 400% FPL eliminates the entire credit.
For 2026 the 400% FPL threshold is:
Roth conversion strategy for Washington
The WA-specific playbook depends on tier:
- Identify your cliff distance. Compute MAGI from all income sources (wages, capital gains, interest, dividends, traditional withdrawals). Find your headroom under 400% FPL. Use the live cliff widget above for a quick check.
- Stay under the cliff if you can. In a no-state-income-tax state like Washington, the cliff IS the optimization. Convert just enough to fill out your headroom — every dollar over costs the full federal PTC.
- If you must go over, convert big. Once you've crossed the cliff, additional conversion dollars only cost federal + state tax (no incremental PTC loss). A "rip the bandage" conversion year can be efficient if you have many traditional dollars to move.
- Coordinate with capital gains and the 0% LTCG bracket. Washington has no state income tax on wages or ordinary investment income, but a state capital-gains tax applies to realized LTCG above the standard deduction ($278,000 for 2025, the latest the Department of Revenue has published): 7% on the first $1 million of taxable gains and 9.9% above that from tax year 2025 (enacted 2021, upheld by the state supreme court in 2023).
- Plan ahead for IRMAA. The IRMAA Medicare premium surcharge has a 2-year lookback. A Washington resident in their early 60s converting today will see IRMAA implications at 65. See RMD + IRMAA calculator for the lookback math.
State tax basics for Washington retirees
| Question | Washington |
|---|---|
| State income tax | None |
| Number of brackets | No brackets (no income tax) |
| Social Security taxed | No |
| 401(k) / Traditional IRA taxed | No / exempt |
| Retirement-income exclusion (couple) | None |
| Roth conversion draws that exclusion | Not applicable |
| State estate / inheritance tax | Yes |
| Retirement-friendliness tier | tax free |
| Notable feature | no income tax, but a 7% capital gains tax on long-term gains above the $278,000 standard deduction (2025), rising to 9.9% on gains over $1 million, and an estate tax exclusion of at least $3 million (2026) (WA DOR capital gains standard deduction ($278,000 for 2025); WA DOR estate tax exclusion ($3,000,000; $3,076,000 for deaths Jan 1 to Jun 30, 2026)) |
| 30-yr planner success rate | 84.05% |
| Median 30-yr tax, federal + state + IRMAA (rank) | $162,597 (#1/51) |
Model your full Washington retirement scenario
Free Monte Carlo (100 paths per run; 10,000 with PRO) with state-specific tax engine, ACA cliff, Roth conversion optimizer, IRMAA lookback — free, no signup.
Run a free simulation →What a year-end move does to your Washington and federal tax in 2026
Each move changes three bills at once: the federal return, the Washington return and, for anyone on Medicare, the IRMAA surcharge the 2026 income sets for 2028. Example: a married couple, both 72, with a $40,000 pension, $50,000 of Social Security, a $30,000 IRA withdrawal and $10,000 of long-term gains already realized in 2026, the pension, the IRA money and the conversion split evenly between them on the state return. Each row is that year with one move made, against the same year without it (negative = less tax).
| Move (by December 31, 2026) | Federal tax | Washington tax | IRMAA in 2028 |
|---|---|---|---|
| Convert $25,000 to a Roth IRA | $3,165 | $0 | $0 |
| Send $10,000 of the IRA withdrawal to charity as a QCD | −$1,200 | $0 | $0 |
| Harvest a $5,000 loss against the year's gains | $0 | $0 | $0 |
An estimate from QuantCalc’s open tax engine (federal 2.6.1, state 1.28.0) for the 2026 tax year. Not tax advice: your return depends on facts this page does not ask about, so check a move with your tax preparer or custodian before acting. IRMAA uses the 2026 tiers for two people on Medicare; the 2028 tiers are not published yet. How the engine computes each line, with its official source: federal, Washington.
Related calculators and reading
- All-states retirement tax comparison — see Washington alongside the other 50 jurisdictions.
- Washington minimum wage 2026 — the hourly rate, scheduled increases and take-home pay after tax, from the official sources.
- State Retirement Tax Data 2026 — the per-jurisdiction rate, exclusion and Social Security figures behind this page, as CSV and JSON.
- Washington side by side with another state's retirement taxes: Washington vs Texas · California vs Washington.
- ACA Subsidy Cliff Optimizer — find the largest Roth conversion that keeps you under 400% FPL.
- Roth Conversion Optimizer — bracket-fill vs. fixed-amount strategy comparison.
- RMD + IRMAA Calculator — Medicare premium surcharge based on 2-year-old MAGI.
- Safe Withdrawal Rate Calculator — sequence-of-returns-aware withdrawal planning.
- Research: 51-State 30-year Monte Carlo (2026) — full ranking and dataset.
- Research: Monte Carlo ACA Cliff 2026 — 80,000-path study of the cliff cost.
FAQ
What is the Washington state income tax rate in 2026?
Washington has no state income tax in 2026: wages, pensions, IRA and 401(k) withdrawals, Social Security, interest and dividends are not taxed by the state (Washington Department of Revenue; rules). Instead it levies an excise of 7% on long-term capital gains above $278,000 a year, plus 2.9% on the part above $1,000,000; gains inside IRAs and 401(k)s and on real estate are outside it (Washington State Legislature; rules).
How much state income tax does a retiree pay in Washington?
It depends on the kind of income. In 2026, a married couple, both 70, with $40,000 of Social Security, a $30,000 private pension and $30,000 of IRA withdrawals ($100,000 in all; the pension and IRA money split evenly between them) owes $0 of Washington tax, and a single 62-year-old with $24,000 of Social Security, an $18,000 pension and $18,000 of IRA withdrawals ($60,000 in all) owes $0. The same couple with a $400,000 long-term gain on stock owes an excise of $8,540. Federal tax comes on top: $5,087 and $4,111.
Does Washington have local income taxes?
No. No county, city or school district in Washington levies an income tax that the tax engine computes for 2026.
Does Washington tax Roth conversions?
Washington has no state income tax, so Roth conversions cost $0 in state tax. The conversion is still a federal taxable event and can still trigger the 400% FPL ACA premium-tax-credit cliff.
What is Washington's 30-year Monte Carlo retirement success rate?
In QuantCalc's 51-state planner study, one married couple (both 60, $2M, 60/40, $80,000 a year to spend after tax, 10,000 paths) succeeds in 84.05% of paths in Washington; across all 51 jurisdictions the rate runs from 80.61% to 84.05%. The median path pays $162,597 of federal and state income tax and IRMAA over 30 years, $0 of it Washington state income tax.
What is the ACA cliff in Washington for 2026?
The ACA premium-tax-credit cliff is a federal threshold, not state-specific. For a household of two in 2026, it sits at 400% of the federal poverty level — $84,600. Crossing it by even $1 of MAGI eliminates the full subsidy now that the 2021-2025 enhanced credit has expired.
Is Washington a good state to retire for tax purposes?
Washington is one of the most retirement-tax-friendly states in the U.S. No income tax, but a 7% capital gains tax on long-term gains above the $278,000 standard deduction (2025), rising to 9.9% on gains over $1 million, and an estate tax exclusion of at least $3 million (2026). In our planner study it ranks #1 of 51 (tied with 15 others) by median lifetime tax (1 = lowest).
Does Washington tax Social Security benefits?
Washington has no state income tax, so Social Security benefits are not taxed at the state level.
Does Washington tax 401(k) and IRA withdrawals?
Washington has no state income tax, so 401(k) and traditional IRA withdrawals are not taxed at the state level.
Does Washington have a state estate or inheritance tax?
Yes — Washington has a state-level estate or inheritance tax in addition to the federal estate tax. Plan transfers accordingly.
How does Washington tax capital gains?
Washington has no state income tax on wages or ordinary investment income, but a state capital-gains tax applies to realized LTCG above the standard deduction ($278,000 for 2025, the latest the Department of Revenue has published): 7% on the first $1 million of taxable gains and 9.9% above that from tax year 2025 (enacted 2021, upheld by the state supreme court in 2023).
Last updated 2026-11-05. Washington levies no state income tax, so there is no state rate schedule to apply. ACA poverty-level figures: the 2025 HHS poverty guidelines for the 48 contiguous states and DC ($15,650 for one person, plus $5,500 for each additional person; 90 FR 5917), which set 2026 Marketplace coverage. Premium tax credit estimates use Washington's average benchmark Silver premium. Monte Carlo numbers from the QuantCalc 51-state planner study (v2026.3, re-run 2026-10-12, CC-BY-4.0). This page is educational. Not tax, legal, or financial advice — consult a qualified advisor.