Washington's 9.9% Tax on Income Over $1 Million Starts January 1, 2028

Beginning January 1, 2028, Washington taxes individual income above $1,000,000 at 9.9%. That is SB 6346, Chapter 238, Laws of 2026: passed 27–22 in the Senate and 51–46 in the House, signed March 30, 2026, with the first payments and returns due in calendar 2029. Between now and then sits one more date: Initiative 645 is certified to the November 3, 2026 statewide ballot, and it would repeal the tax before its first dollar is collected.

Washington's income-tax line in the 2026 rate tables reads 0.00%, and for nearly every filer it stays zero in 2028 too. The governor's signing announcement puts the payers at less than one half of one percent of Washingtonians. TaxMath's five reference filers top out at the $250,000 household, a quarter of the way to the deduction.

One deduction of $1 million per household, however it files

Chapter 238 computes its base from federal adjusted gross income with Washington modifications, then subtracts a standard deduction of $1,000,000 per individual. Spouses and domestic partners do not get two: their "combined standard deduction is limited to $1 million, regardless of whether they file joint or separate returns," as the final bill report puts it.

So the tax reaches households no single earner would put there. Two spouses each earning $600,000 in 2028 report $1,200,000 together; the shared deduction removes $1,000,000; the remaining $200,000 × 9.9% comes to $19,800, though neither spouse alone clears seven figures. The deduction holds at $1,000,000 for the 2028 and 2029 tax years, then adjusts for inflation beginning with taxes collected in 2030 and every second year after. Chapter 238 also allows a charitable deduction, capped at $100,000 per individual, combined and non-doubling on the same terms, and only for organizations principally directed and managed in Washington.

Where the money goes is written into the bill: the state general fund, except 5% of each year's collections deposited into the Fair Start for Kids Account each July 1, beginning in 2029. The budget signed around it, per the governor's announcement, funds free K-12 school meals and an expanded Working Families Tax Credit; the statute's own earmark is that 5%.

The 9.9% Washington already collects

Since tax year 2025, RCW 82.87.040 has imposed a 7% excise on long-term capital gains above an inflation-indexed deduction, plus 2.9% more (9.9% in total) on the portion of taxable gains above $1,000,000. ESSB 5813 (2025 c 421) added that second tier for gains realized in 2025 onward, and its $1,000,000 is measured after the deduction comes off.

The deduction is $278,000 for gains realized in 2025, reported on the return due the same day as the 2025 federal return, in April 2026. It belongs to the household: one deduction "per individual, married couple, or domestic partnership," in the Department of Revenue's phrasing. SB 6346's non-doubling $1,000,000 repeats the design the capital gains tax has used since 2022.

The arithmetic on a $1,500,000 stock sale in 2025: $1,500,000 − $278,000 leaves $1,222,000 of Washington capital gains. 7% × $1,222,000 is $85,540. The 2.9% tier applies to $222,000, the portion above $1,000,000, adding $6,438. Total: $91,978, an effective 6.1% of the whole gain.

One figure is still open: as of September 1, 2026, DOR has not published the inflation-adjusted deduction for gains realized in 2026. The calculator carries 2025's $278,000 for 2026 until the department prints the real number.

A tax on receiving, under a constitution that taxes owning

Article VII, Section 1 of the state constitution requires taxes to be "uniform upon the same class of property" and defines property as "everything, whether tangible or intangible, subject to ownership." Culliton v. Chase read income as property in 1933, and Quinn v. State (2023), which upheld the capital gains tax by classifying it as an excise on the act of selling rather than a property tax on what the sale produced, left that reading in place. Voters then kept the tax: Initiative 2109, the repeal measure, failed in November 2024, 35.89% yes to 64.11% no, with 2,437,419 votes against repeal.

SB 6346 is drafted for the same doorway. Its operative clause imposes the 9.9% "on the receipt of Washington taxable income" — a tax on an event, receiving, in the pattern Quinn approved for selling. Initiative 645 is drafted to close the doorway itself. Its ballot title, set May 4, 2026, describes a measure that would repeal the 9.9% tax, prohibit taxes "on individual income or the receipt of individual income," and define "individual" as a natural person "for purposes of excise taxes." The quoted phrases track the statute's own drafting, clause by clause.

Six days earlier, the estate tax went the other way

Governor Ferguson signed SB 6347, Chapter 209, Laws of 2026, on March 24, 2026. For deaths on or after July 1, 2026, it rolls the top estate-tax rate back to 20%, ending the 35% top rate that 2025's ESSB 5813 had applied to deaths from July 1, 2025 through June 30, 2026. The exclusion is $3,000,000 for deaths on or after July 1, 2026, after sitting at $3,076,000 for the first half of the year, and DOR notes it is no longer set to rise; the statute's inflation reference has expired. In the same March, one legislature created an income tax and unwound an estate-rate increase.

Three dates, and a rate Oregon already charges

Oregon's top marginal rate for 2026 is 9.90% — the number Washington wrote into both of its new taxes — and Oregon applies it to ordinary wages. Idaho taxes wages at a flat 5.30% for 2026. Washington's answer for a $65,000 single filer is $0 in 2026 and, whatever happens in November, $0 in 2028: that filer sits $935,000 under the deduction. Where the rest of Washington's stack (sales, B&O, estate) sits against the other eight zero-income-tax states is in the nine-state comparison.

What remains is a calendar. November 3, 2026: Initiative 645 goes to the voters. January 1, 2028: absent repeal, the 9.9% applies to income above the household's $1,000,000 deduction. Calendar 2029: the first returns and payments come due, and the first 5% transfer to Fair Start for Kids follows that July 1.

This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.