How Washington capital gains tax works
Washington has no general state income tax, so most capital gains are not taxed at the state level.
Washington taxes long-term capital gains over roughly $270,000 at 7%; ordinary income is untaxed.
You will still owe federal capital gains tax — this calculator estimates the state portion only.
Federal tax still applies
The IRS taxes long-term gains (assets held over a year) at 0%, 15% or 20% depending on income, and short-term gains as ordinary income.
So even in a no-income-tax state, selling an investment at a profit usually creates a federal tax bill.
Frequently asked questions
Does Washington tax capital gains?
Washington has no general state income tax, so most capital gains are not taxed by the state. Washington taxes long-term capital gains over roughly $270,000 at 7%; ordinary income is untaxed.
What is the capital gains tax rate in Washington?
There is no state capital gains rate in Washington for ordinary investors. Federal rates of 0%, 15% or 20% still apply.
Are long-term gains taxed lower in Washington?
Washington taxes long-term capital gains over roughly $270,000 at 7%; ordinary income is untaxed.
Does this include federal capital gains tax?
No. This estimates the WA state tax only. Federal capital gains tax is separate and applies on top.