Washington Capital Gains Tax (2026)
Washington has no personal income tax, but it levies a 7% excise tax on long-term capital gains above $278,000 a year (an extra 2.9% applies above $1,000,000). Real estate is exempt, and short-term gains are not taxed by the state. Run your own numbers with the free capital gains tax calculator, which estimates federal, NIIT, and Washington tax together.
In short: federal long-term rates of 0%, 15%, or 20% apply everywhere. At the state level, Washington adds nothing for most sales.
How Washington treats capital gains
Washington has no personal income tax, but it levies a 7% excise tax on long-term capital gains above $278,000 a year (an extra 2.9% applies above $1,000,000). Real estate is exempt, and short-term gains are not taxed by the state.
A worked example
Say you are a single filer in Washington with $60,000 of taxable income who sells stock held over a year for a $25,000 long-term gain. Federal tax on the gain is $3,750 (all of it lands in the 15% bracket at this income; no NIIT applies below $200,000 MAGI). Washington adds nothing here: the excise tax only starts above $278,000 of annual long-term gains. Scale the sale up to a $500,000 long-term gain, though, and Washington's excise adds $15,540 (7% of the amount above the deduction). These figures use the same math as the calculator, 2026 federal brackets per IRS Rev. Proc. 2025-32, and state figures from the Tax Foundation's State Individual Income Tax Rates and Brackets, 2026.
Frequently asked questions
Does Washington tax capital gains?
Not in the usual way. Washington has no personal income tax, but it charges a 7% excise tax on long-term capital gains above $278,000 per year, with an extra 2.9% above $1,000,000. Real estate sales are exempt, and short-term gains are not taxed by the state.
What will I pay on a long-term gain in Washington?
Federally, a long-term gain is taxed at 0%, 15%, or 20% depending on your taxable income, plus the 3.8% NIIT above $200,000 MAGI (single). Washington adds state tax only when annual long-term gains top $278,000.
Do I still owe federal capital gains tax in Washington?
Yes. Federal capital gains tax (0%, 15%, or 20% long-term, ordinary rates short-term, plus the 3.8% NIIT for high earners) applies no matter your state. The free calculator estimates federal, NIIT, and Washington tax together.
More
- Every state's capital gains treatment
- Capital gains tax explained: short-term vs long-term
- Neighbors alphabetically: Virginia · West Virginia
This page is general information, not tax, legal, or financial advice. Rates and rules can change and depend on your situation. Confirm details with a tax professional, the IRS, or your state's revenue department.
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