Washington Income Tax Structure

Washington has no state income tax on wages, salaries, or tips. This means residents keep more of their earned income and only pay federal income taxes and FICA taxes (Social Security and Medicare) on their wages.

Washington Capital Gains Tax

While Washington doesn't tax regular income, it does have a 7% tax on long-term capital gains that exceed $262,000 annually (as of 2024). This applies to profits from selling stocks, bonds, and other investments held for more than one year, with various exemptions for real estate, retirement accounts, small businesses, and agricultural properties.

Note: This calculator only estimates taxes on wage income, not investment income.

Washington Working Families Tax Credit

While not a traditional income tax, Washington does offer the Working Families Tax Credit, which is similar to the federal Earned Income Tax Credit. For 2024, eligible low to moderate income residents can receive up to $1,200, depending on income level and number of qualifying children.

Federal Income Tax

Federal income tax is based on federal tax brackets, your filing status, deductions, and W-4 allowances. Pre-tax deductions like 401(k) or HSA contributions reduce your federal taxable income.

FICA Taxes

FICA taxes fund Social Security and Medicare.

• Social Security: 6.2% on income up to $168,600 for 2024.
• Medicare: 1.45% on all income, with an additional 0.9% on income above certain thresholds.

Other Washington Taxes

• Sales Tax: Washington has a state sales tax rate of 6.5%, which is among the highest in the nation. Local jurisdictions can add their own rates, bringing the total to as high as 10.5% in some areas.
• Property Tax: Washington property taxes are relatively moderate with an average effective property tax rate of approximately 0.92% of a property's assessed value.
• Business & Occupation Tax: Instead of a corporate income tax, Washington imposes a Business & Occupation (B&O) tax on the gross receipts of businesses operating in the state.
• Estate Tax: Washington has an estate tax for estates valued over $2.193 million, with rates ranging from 10% to 20%.

Disclaimer: This information is for general guidance for the 2024 tax year and is not tax advice. Consult a tax professional for personalized advice.