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 2.3.2, state 1.14.2), 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 our 510,000-path Monte Carlo study of 30-year retirement outcomes, Washington retirees finished at 76.63% success rate (ranked #2 of 51 by success rate, #12 of 51 by lowest median lifetime state tax). Median 30-year state-tax cost: $0. Median terminal balance after 30 years: $1,016,505. 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 over $262k and a $2.193m estate exemption.
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 ordinary income (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 approximately $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 Monte Carlo data says about Washington
QuantCalc Research ran a 30-year, 10,000-path Monte Carlo simulation for an identical representative retiree (age 60, $2M starting balance, 60/40 portfolio, $80K real annual spend) in each of the 51 U.S. jurisdictions. Here's how Washington compared to the best- and worst-case states:
| Metric | Washington | Wyoming (best) | California (worst) |
|---|---|---|---|
| 30-year success rate | 76.63% | 77.11% | 69.03% |
| Rank (of 51) | #2 | #1 | #51 |
| Median lifetime state tax (30y) | $0 | $0 | $154,980 |
| Median total tax (30y) | $218,400 | $218,400 | $373,380 |
| Median terminal balance | $1,016,505 | $999,751 | $695,612 |
| Δ success vs Wyoming | -0.48 pp | — | −8.08 pp |
Sources: QuantCalc 51-State Monte Carlo Study (2026-05-12) — 510,000 total paths, methodology fully documented and dataset released CC-BY-4.0. Washington's row in the dataset uses the same portfolio + spend + retirement age as every other state — the only variable is state tax treatment.
How Washington treats capital gains in retirement
Washington has no state income tax on wages or ordinary investment income, but a 7% state capital-gains tax kicks in on realized LTCG over $262,000 per year (enacted 2022, upheld by state supreme court 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:
- Household of 1: $62,600
- Household of 2: $84,600
- Household of 3: $106,600
- Household of 4: $128,600
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 7% state capital-gains tax kicks in on realized LTCG over $262,000 per year (enacted 2022, upheld by state supreme court 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 over $262K and a $2.193M estate exemption |
| 30-yr MC success rate (rank) | 76.63% (#2/51) |
| Median 30-yr state tax | $0 |
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 2.3.2, state 1.14.2) 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.
- State Retirement Tax Data 2026 — the per-jurisdiction rate, exclusion and Social Security figures behind this page, as CSV and JSON.
- 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 510,000-path Monte Carlo study, a representative retiree in Washington (age 60, $2M balance, 60/40 portfolio, $80K real spend) finished 30 years at 76.63% success rate — ranked #2 of 51 jurisdictions. Median 30-year state tax: $0. Median terminal balance: $1,016,505.
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 over $262k and a $2.193m estate exemption. In our Monte Carlo ranking it placed #2 of 51 jurisdictions.
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 7% state capital-gains tax kicks in on realized LTCG over $262,000 per year (enacted 2022, upheld by state supreme court 2023).
Last updated 2026-10-02. 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 research drop (2026-05-12, CC-BY-4.0). This page is educational. Not tax, legal, or financial advice — consult a qualified advisor.