Capital Gains Tax in Washington (2026)
Washington has no income tax — but a 7% excise tax hits long-term capital gains above about $270,000 (est.). Real estate and short-term gains are exempt. Run the combined federal + Washington number below.
Reviewed & updated · 2026 tax-year figures · Federal + Washington state
Washington has no income tax — but since 2022 it levies a 7% excise on long-term capital gains. Under RCW 82.87, the 7% applies only to the portion of a long-term gain above an annual standard deduction of about $270,000 (est. 2026). Short-term gains are not taxed by the state, and real estate sales are fully exempt — as are retirement-account assets. The excise sits on top of the federal 0/15/20% rate (IRC §1(h)) and the 3.8% NIIT (§1411). A large long-term stock or crypto gain is where Washington bites; a home sale or a quick flip owes the state $0.
Net proceeds $178,150$21,850
Show our work federal + WA, step by step
Estimates only, for the 2026 tax year. Not tax advice. Washington's 7% capital gains excise on long-term gains above ~$270,000 (est.) is set by statute (RCW 82.87) and is not inflation-indexed; federal bracket thresholds and standard deductions are projected 2026 amounts, marked est. and owner-verifiable against the final IRS release.
How does Washington tax capital gains?
Washington has no personal income tax — wages, interest, and short-term trading profits are untaxed by the state. Since 2022, however, it imposes a 7% excise tax on long-term capital gains under RCW 82.87. The tax reaches only the gain above a per-person standard deduction of about $270,000 for 2026 (est.; the figure is inflation-adjusted from $250,000 in 2023). A long-term gain at or below that deduction owes the state nothing.
The excise is narrow by design. It applies to long-term gains from stocks, bonds, and similar capital assets — but real estate sales are entirely exempt (RCW 82.87.050), as are assets held in retirement accounts, and short-term gains fall outside it completely. The tax was upheld by the Washington Supreme Court in 2023, and a 2024 ballot measure to repeal it (Initiative 2109) failed — so the 7% is settled law for the 2026 tax year.
How does Washington stack on top of federal?
The two systems run in parallel and the amounts are added — Washington's excise does not replace the federal tax. For a long-term gain on stocks or crypto above the deduction, you owe:
- Federal: 0%, 15%, or 20% depending on where the gain stacks on your taxable income, under IRC §1(h);
- Federal NIIT: an extra 3.8% on net investment income once MAGI passes $200,000 (single) / $250,000 (joint), under IRC §1411; and
- Washington: 7% on the portion of the long-term gain above ~$270,000 (est.), under RCW 82.87.
Add those together and a high earner with a large long-term gain can pay roughly 20% + 3.8% + 7% ≈ 30.8% on the slice above the deduction. But a short-term gain or a real-estate sale owes Washington $0 — only the federal side applies. The calculator above computes each layer separately and shows the exact figures.
What is Washington's capital gains excise rate?
Washington does not tax income, so there is no bracket schedule. The capital gains excise is a single flat rate on a narrow base — here is how it works.
| Washington capital gains excise | Rate or rule |
|---|---|
| Long-term gain above the deduction · RCW 82.87.040 | 7% |
| Standard deduction (per person, 2026 est.) | ~$270,000 |
| Short-term capital gain | Not taxed |
| Real estate sale | Exempt · RCW 82.87.050 |
| Retirement-account assets | Exempt |
How this calculator works & where the numbers come from
No black box. The federal side uses the same unit-tested engine as our main calculator: net gain = proceeds − basis; classify by holding period; for long-term gains, subtract the standard deduction and stack the gain across the 0/15/20% bands per IRC §1(h); add 3.8% NIIT where modified AGI crosses the §1411 threshold; short-term gains are computed as the true marginal difference in ordinary tax. The Washington side applies the 7% excise (RCW 82.87) only to a long-term gain from a non-real-estate asset, and only to the portion above the ~$270,000 (est.) standard deduction — short-term gains and real estate are $0. The two results are summed.
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Primary sources (linked, not just named)
- RCW 82.87 — capital gains excise tax
- Washington Dept. of Revenue — capital gains tax
- Washington Department of Revenue
- 26 U.S.C. §1(h) — federal capital gains rates
- 26 U.S.C. §1411 — 3.8% NIIT
- 26 U.S.C. §121 — home-sale exclusion
- IRS Topic No. 409 — Capital Gains and Losses
- IRS Publication 550 — Investment Income
Washington capital gains tax, answered
Does Washington have a capital gains tax?
Yes — a 7% excise on long-term gains, since 2022. Under RCW 82.87, Washington taxes long-term capital gains above an annual standard deduction of about $270,000 (est. 2026) at 7%. It is not an income tax (Washington has none); the state Supreme Court upheld it as an excise in 2023. Short-term gains and real estate sales are not taxed.
How much is Washington capital gains tax in 2026?
7% of your long-term gain above about $270,000 (est.). A long-term gain at or below the deduction owes $0 to the state; short-term gains and real-estate sales owe $0 regardless. The 7% sits on top of the federal 0/15/20% rate (IRC §1(h)) and the 3.8% NIIT, so a large long-term gain can reach roughly 30.8% combined on the amount over the deduction. Use the calculator above for your exact figure.
What is exempt from Washington's capital gains tax?
Real estate is fully exempt (RCW 82.87.050), as are retirement-account assets, certain family-owned small business sales, livestock, and timber. All short-term gains are outside the tax, and the first ~$270,000 (est.) of long-term gain each year is deducted before the 7% applies.
Does Washington tax short-term capital gains?
No. The excise reaches only long-term gains (assets held more than one year). A short-term gain owes $0 to Washington — though it is still taxed federally as ordinary income (10%–37%).
Is Washington's capital gains tax legal?
Yes. The Washington Supreme Court upheld the tax as a valid excise in March 2023, and voters rejected a repeal (Initiative 2109) in November 2024. It applies for the 2026 tax year.
Does the 3.8% federal NIIT apply in Washington?
Yes — the NIIT is federal and applies in every state. Once modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly), the 3.8% surtax under IRC §1411 hits the lesser of your net investment income or the amount over the threshold. It is separate from and on top of Washington's 7% excise.
Compare Washington with other state hubs
Washington is unusual: its 7% excise hits only long-term gains above ~$270,000 (est.), so most sellers owe the state nothing — but a large stock or crypto gain can pay more than in some income-tax states. It is narrower than California, which taxes all gains as ordinary income up to 13.3%, and unlike the no-income-tax states Texas and Florida, Washington does tax large long-term gains. New York tops 10%; Illinois is a flat 4.95%. Every state page combines the same unit-tested federal engine with that state's own rules, so you always see the full combined number, not just half of it. The main Capital Gains Tax Calculator lets you fold any state's rate into your federal receipt.