Washington individual income tax
Washington refrains from levying individual income tax on its residents but does enforce a capital gains tax.
7%
Capital gains tax rate
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What is Washington income tax?
Individual income tax
The state of Washington is one of states in the USA that does not collect individual income tax. However, it levies capital gains tax on individuals.
Taxable incomes
Washington taxes only capital gains and income from businesses and occupation.
Tax rate
Washington levies capital gains tax of 7%.
Standard deduction
Standard deductions can be used to reduce the long term capital gains. $250,000 for all filers regardless of filing status.
Exemptions
Sale of real-estate is exempt from capital gains tax.
Individual income tax
The State of Washington is the only state of the US that doesn't have personal income tax but has a capital gains tax.
Types of taxable incomes
Washington does not levy personal income taxes, unlike most other states in the US. However, it taxes capital gains.
Capital gains from stocks, bonds, business interests and tangible assets are taxed at 7% by Washington.
This tax is applicable to individuals, even if it is through pass-through ownership.
Capital gains tax is applicable only to gains from within the State of Washington.
Capital gains from sale of real estate is exempt from capital gains tax.
File return & pay taxes
Since Washington doesn't have personal income tax, taxpayers who do not have income from taxable sources do not require to file returns or pay taxes.
You are required to pay taxes if you collect sales tax, have capital gains from sale of taxable assets.
The capital gains tax was enacted in 2021, however this is subject to a lawsuit which is pending a hearing.
You are still required to file federal returns and pay federal taxes, even if you are a Washington resident.
Due
April 18, 2023
Residency
Residency is based on an individual being physically present in Washington or having the intention of being in the state.
Washington resident
A resident is a person who lives in Washington with the intention of staying there indefinitely, has had their primary home in Washington.
You are considered a resident, even if you aren't in the state, however intends to reside in the state.
Washington non-resident
A person who does not meet Washington residency requirements
Frequently asked questions
Business entities in Washington
There are several business entities in Washington
Washington LLC
Page sponsorWhy we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time