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Washington Capital Gains Tax Calculator (2026)

7 verified sources|Last verified 2026-04-05

What you need to know

Washington does not levy a traditional income tax on wages or salary, but does impose a capital gains excise tax on investment profits. No income tax on wages/salary. Capital gains excise tax: 7% on gains above $278K standard deduction (2025), 9.9% on gains above $1M. Upheld by WA Supreme Court March 2023. Exemptions: real estate, retirement accounts, livestock/timber. This means Washington residents pay no state tax on their paychecks but face state taxes when selling investments, real estate, or other capital assets above certain thresholds. This calculator computes your combined federal and Washington capital gains tax liability based on your specific situation.

At the federal level, the tax rate on your capital gain depends on how long you held the asset and your total taxable income. Long-term gains (assets held 12+ months) are taxed at preferential rates of 0%, 15%, or 20%, while short-term gains (held less than 12 months) are taxed as ordinary income at rates from 10% to 37% across the TY2026 brackets. The 3.8% Net Investment Income Tax (NIIT) also applies when your modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly.

**Recent changes:** 2021: 7% CG tax enacted. 2023: Upheld by Supreme Court. 2025: New 9.9% tier for gains >$1M. Deduction rose from $270K to $278K.

**How Washington compares:** WA has no wage tax but 7-9.9% CG tax vs OR's 9.9% on all income.

For a comprehensive view of your tax situation, use our Washington after-tax income calculator or explore our national capital gains tax calculator. You can also plan ahead with our 401(k) retirement calculator.

How Washington taxes capital gains

Washington has no state income tax on wages, but imposes a capital gains excise tax on long-term investment gains: 7% (gains >$278K), 9.9% (gains >$1M). No income tax on wages. No income tax on wages/salary. Capital gains excise tax: 7% on gains above $278K standard deduction (2025), 9.9% on gains above $1M. Upheld by WA Supreme Court March 2023. Exemptions: real estate, retirement accounts, livestock/timber.

**Combined tax impact:** When you sell a long-term investment in Washington, your total tax is the sum of federal capital gains tax (0%, 15%, or 20% depending on your total income), the Washington capital gains excise tax, and potentially the 3.8% federal Net Investment Income Tax if your MAGI exceeds $200,000 (single) or $250,000 (joint). Short-term gains (held under 12 months) are taxed federally as ordinary income (10-37%) plus the same state CG excise on the gain amount above the standard deduction threshold.

**Key deductions and credits:** $278,000 standard deduction for CG (2025, inflation-adjusted). Charitable deduction up to $250K.

What makes Washington different

**Recent legislative changes:** 2021: 7% CG tax enacted. 2023: Upheld by Supreme Court. 2025: New 9.9% tier for gains >$1M. Deduction rose from $270K to $278K.

**Regional comparison:** WA has no wage tax but 7-9.9% CG tax vs OR's 9.9% on all income.

**National tax landscape:** Washington is one of nine states with no individual income tax on wages — joining Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Wyoming, and New Hampshire. Among these, Washington is distinctive in levying a standalone capital gains excise tax on high-value investment gains while leaving wage income untaxed. This two-track approach — no tax on labor income, targeted tax on investment gains — makes Washington particularly attractive for wage earners and less so for investors with large capital gains.

Compare your tax situation with neighboring states: Idaho capital gains tax calculator, Oregon capital gains tax calculator, 401(k) retirement calculator.

Capital gains examples for Washington residents

Understanding how federal and Washington taxes combine on investment gains helps you plan sales strategically.

**Example 1: $50,000 long-term gain, single filer.** At this gain amount, the Washington capital gains excise tax may not apply if the gain is below the current standard deduction threshold ($278,000 for 2025). Federal long-term capital gains tax applies at 15% for most income levels.

**Example 2: $400,000 long-term gain, married filing jointly.** The portion above the standard deduction threshold is subject to the Washington capital gains excise tax. Federal long-term capital gains tax applies at 20% on gains above the federal $583,750 MFJ threshold. 3.8% NIIT applies on investment income above the federal MAGI threshold.

**Example 3: $1,500,000 long-term gain, high earner.** The 9.9% tier applies to the portion above $1 million. Combined with federal 20% capital gains tax and 3.8% NIIT, the effective rate on the top portion can approach or exceed 33%.

Explore our Washington after-tax income calculator to see how wage-side taxes combine with your overall financial picture.

Capital gains tax strategies for Washington

Several strategies can help Washington investors manage capital gains tax efficiently.

**Hold for long-term treatment.** Federal long-term capital gains rates (0%, 15%, 20%) are significantly lower than short-term rates (10-37% ordinary income). Assets held 12+ months qualify for the lower federal rate.

**Stay below the standard deduction threshold.** Washington's capital gains excise tax applies only to gains above the standard deduction ($278,000 for 2025, inflation-adjusted). Structuring sales across multiple tax years can keep you below the threshold.

**Leverage exemptions.** Washington's capital gains excise tax exempts real estate, retirement account distributions, and livestock/timber sales. Prioritize taxable portfolio reviews and tax-loss harvesting within taxable brokerage accounts.

**Consider the NIIT threshold.** The 3.8% federal Net Investment Income Tax adds to the combined rate on high-income investors. MAGI management strategies (pre-tax retirement contributions, timing of Roth conversions) can help stay below the NIIT threshold.

Review our Washington after-tax income calculator for wage-income planning alongside your investment strategy.

Capital gains filing for Washington

Understanding Washington's tax filing requirements helps you stay compliant and avoid surprises.

**Washington Form CGT-1 (or equivalent):** Capital gains excise tax is reported separately from federal Form 1040 Schedule D. Residents must file state-specific CG reporting if gains exceed the standard deduction threshold.

**Filing deadline:** Washington's capital gains excise tax is typically due April 15 alongside federal returns, though the state may grant automatic extensions matching federal extension filings.

**Record-keeping:** Maintain detailed records of purchase price (cost basis), acquisition date, sale price, and associated costs for every taxable sale. Washington's tax agency may request documentation to verify exempt categories (real estate, retirement accounts, etc.).

Compare your tax situation nationally with our national capital gains tax calculator.

State-specific note

No income tax on wages/salary. Capital gains excise tax: 7% on gains above $278K standard deduction (2025), 9.9% on gains above $1M. Upheld by WA Supreme Court March 2023. Exemptions: real estate, retirement accounts, livestock/timber. Notable deductions and credits: $278,000 standard deduction for CG (2025, inflation-adjusted). Charitable deduction up to $250K.

How we calculate this

This Washington-specific calculator applies the IRS progressive rate schedule — sometimes called the 'bracket stacking' or 'DTI-equivalent layering' method — using the 2025 federal capital gains tax brackets as published by the IRS (Rev. Proc. 2025-32, updated by the One Big Beautiful Bill Act). For long-term gains (assets held 12+ months), three brackets apply: 0% up to $47,025 for single filers ($94,050 married), 15% up to $518,900 ($583,750 married), and 20% above those thresholds. Your capital gain 'stacks' on top of your ordinary taxable income — so your income determines where in the brackets your gain falls. The standard deduction ($15,750 single, $31,500 married for 2026) is subtracted from your gross income to determine taxable income before bracket placement. For short-term gains (held less than 12 months), the gain is taxed as ordinary income through seven federal brackets from 10% to 37%.

The calculator also computes the 3.8% Net Investment Income Tax (NIIT) when your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). These NIIT thresholds are fixed — not inflation-adjusted — so more taxpayers are affected each year. State capital gains tax uses each state's effective top rate on investment income, sourced from the Tax Foundation 2025 data. The low-to-high range accounts for potential deductions, investment losses, and local tax variations not captured in the state average rate.

Key takeaways

  • Washington taxes capital gains at 7% (gains >$278K), 9.9% (gains >$1M). No income tax on wages. on top of federal rates.
  • Long-term gains (held 12+ months) are taxed at 0%, 15%, or 20% federal — significantly lower than short-term rates of 10-37%.
  • WA has no wage tax but 7-9.9% CG tax vs OR's 9.9% on all income.
  • Recent changes: 2021: 7% CG tax enacted. 2023: Upheld by Supreme Court. 2025: New 9.9% tier for gains >$1M. Deduction rose from $270K to $278K.
  • The 3.8% Net Investment Income Tax (NIIT) applies when modified AGI exceeds $200,000 (single) or $250,000 (married).
Step 1 of 3

What did you sell?

Enter what you paid for the investment and what you sold it for.

The total amount you originally paid for the asset, including fees and commissions.

The total amount you received from the sale, before taxes.

How long did you hold it?

Long-term gains qualify for preferential federal rates (0%, 15%, or 20%). Short-term gains are taxed as ordinary income (10%–37%).

Frequently Asked Questions

How does Washington tax capital gains?
No income tax on wages/salary. Capital gains excise tax: 7% on gains above $278K standard deduction (2025), 9.9% on gains above $1M. Upheld by WA Supreme Court March 2023. Exemptions: real estate, retirement accounts, livestock/timber.
What is the Washington capital gains tax rate for 2025-2026?
Washington's capital gains tax rate is 7% (gains >$278K), 9.9% (gains >$1M). No income tax on wages.. This is added to your federal capital gains tax rate. The combined rate depends on your income level, filing status, and how long you held the investment.
Does the Net Investment Income Tax (NIIT) apply in addition to state tax?
Yes. The 3.8% federal NIIT applies when your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly), regardless of which state you live in. This is in addition to both federal capital gains tax and any Washington state tax.
Have Washington's tax rates changed recently?
2021: 7% CG tax enacted. 2023: Upheld by Supreme Court. 2025: New 9.9% tier for gains >$1M. Deduction rose from $270K to $278K.
How does Washington compare to other states for capital gains tax?
WA has no wage tax but 7-9.9% CG tax vs OR's 9.9% on all income. Use our national capital gains tax calculator to compare exact numbers across all 50 states.

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Data sources

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