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Enter your long-term gains for the year and see what Washington's capital gains tax could be.
The full breakdown
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How timing changes the tax
The same gains, realized in one year or spread evenly across two or three. Each year gets its own standard deduction, and less of the gain reaches the 9.9% rate.
| Timing | Washington tax | Difference |
|---|
Assumes the same figures each year. Spreading a gain, for example through an installment sale, has federal tax, legal, and practical trade-offs to weigh with your CPA and attorney.
How this estimate was calculated
Federal tax is separate
This estimate is Washington's tax only. Federal capital gains tax of up to 20%, and the 3.8% net investment income tax in some cases, apply on top. For a business sale, the Selling a Business Calculator shows both.
Spouses share one deduction
Married couples and domestic partners share one standard deduction, whether they file jointly or separately.
From 2028: a new income tax
Washington's 9.9% tax on income over $1 million starts in 2028, with a credit for capital gains tax paid. Initiative 645 would repeal it. See the Millionaires' Tax Calculator.
Washington's capital gains tax at a glance
Sources: RCW 82.87; Washington Department of Revenue. Until Washington publishes its 2026 figures, the 2025 figures are used.
Washington capital gains tax on example gains
Washington's tax for a Washington resident with no other long-term gains that year, using 2025 figures.
| Gain | Long-term gain | Taxable in Washington | Washington tax | Share of the gain | If spread over two years |
|---|---|---|---|---|---|
| Stock sale, $500,000 long-term gain | $500,000 | $222,000 | $15,540 | 3.1% | $0 |
| Investments, $1.5 million long-term gain | $1,500,000 | $1,222,000 | $91,978 | 6.1% | $66,080 |
| Business interest sold for a $3 million gain | $3,000,000 | $2,722,000 | $240,478 | 8.0% | $183,956 |
| Same $3 million gain, family-owned business deduction | $3,000,000 | $0 | $0 | 0.0% | $0 |
| Home and rental property, $900,000 gain | $900,000 | $0 | $0 | 0.0% | $0 |
The family-owned business example assumes the sale qualifies for the deduction in RCW 82.87.070. Real estate gains remain subject to federal tax. Your results will differ.
How Washington's capital gains tax works
Washington has no tax on wages, but since 2022 it has taxed large long-term capital gains. Here's what's taxed, what isn't, and who pays.
What's taxed
Long-term gains, on assets held more than a year, from selling stocks, bonds, funds, business interests, and other capital assets. Short-term gains aren't taxed. The starting point is your federal net long-term capital gain.
What's exempt
Real estate, including gains on an entity to the extent they come from real estate it owns. Also retirement accounts, depreciable business assets such as equipment, timber and timberland, certain livestock, commercial fishing privileges, condemned property, and goodwill from selling a franchised auto dealership.
Who pays
Individuals, including owners of pass-through businesses on their share of a gain. Gains on stocks and business interests are taxed by Washington if you lived here when you sold. Gains on tangible property, like art or equipment, generally follow where the property was.
How the rates apply
After the standard deduction and other deductions, 7% applies to all taxable gains, and an additional 2.9% applies to the portion above $1 million, for 9.9% on that part. Spouses and domestic partners share one standard deduction.
The family-owned business deduction
Selling all or substantially all (at least 90%) of a qualifying family-owned small business can bring Washington's tax on the sale to zero. You must have held it at least five years, you or family must have materially participated for five of the last ten, and its worldwide gross revenue must be no more than $11,095,000 (2025) in the 12 months before the sale.
Filing and paying
Only people who owe the tax file. The return is due with your federal return, generally April 15, filed electronically with a copy of your federal return. An extension to file doesn't extend the time to pay. Starting with 2026, you can prepay up to six months before the due date.
Credits that can reduce the tax
| Credit | What it covers |
|---|---|
| Tax paid to another state | Income or excise tax paid to another jurisdiction on gains from assets located there, up to the gain included in Washington's tax. |
| Business and occupation (B&O) tax | From 2025, B&O tax paid on the same sale or exchange. |
| From 2028: millionaires' tax | Capital gains tax paid is credited against the new 9.9% income tax, if it takes effect. |
Sources: RCW 82.87.050, 82.87.070, 82.87.100; Washington Department of Revenue.
How does this calculator work?
It applies Washington's capital gains tax law, RCW 82.87, using the latest figures the Department of Revenue has published.
Adds up your gains
Long-term gains on investments, a business interest, and real estate, for one tax year.
Removes what's exempt
Real estate gains, gains that qualify for the family-owned business deduction, and gains Washington can't tax because you lived elsewhere.
Applies deductions
The $278,000 standard deduction, and the charitable deduction for gifts to Washington charities above $278,000, up to $111,000.
Applies the rates
7% on taxable gains, plus 2.9% on the portion above $1 million, and compares realizing the gains over one, two, or three years.
Verify it yourself
Every rule here comes from Washington law and the Department of Revenue.
Questions about Washington's capital gains tax
Does Washington have a capital gains tax?
Yes. Since 2022, Washington has taxed long-term capital gains above a yearly standard deduction at 7%. From 2025, an additional 2.9% applies to taxable gains above $1 million, for 9.9% on that portion.
What is the standard deduction?
$278,000 for 2025, adjusted each year for inflation. Washington hadn't published the 2026 amount as of October 23, 2026. Spouses and domestic partners share one deduction.
Is the 9.9% rate on all of my gains?
No. 7% applies to all taxable gains, and the extra 2.9% applies only to the portion above $1 million. On $1.5 million of gains, for example, taxable gains are $1,222,000 after the standard deduction, and the tax is about $91,978.
Does Washington tax the sale of my home?
No. Real estate is exempt from Washington's capital gains tax, including a home, rentals, land, and commercial property, and gains on an entity to the extent they come from real estate it owns. Federal tax may still apply.
Are short-term gains taxed?
No. Washington's tax applies only to long-term gains, on assets held more than a year.
Do I owe it on my 401(k) or IRA?
No. Assets held in retirement accounts are exempt, including gains when you sell investments inside them.
Does Washington tax the sale of a business?
Gains on business interests, such as shares or an ownership stake, are taxable. Depreciable business assets like equipment are exempt, as is real estate. A sale of a qualifying family-owned small business can owe nothing.
Who qualifies for the family-owned business deduction?
The sale must be of all or substantially all (at least 90%) of the business, held at least five years, with you or family members materially participating for five of the ten years before the sale, and worldwide gross revenue of no more than $11,095,000 (2025) in the 12 months before the sale.
What if I move out of Washington before selling?
Gains on stocks and business interests are allocated to Washington only if you were domiciled here when you sold. Gains on tangible property generally follow where the property was. Domicile depends on facts and intent, so get professional advice before relying on a move.
Can charitable gifts reduce the tax?
Yes. Gifts to Washington charities above $278,000 in a year can be deducted, up to $111,000 (2025 figures).
When is the tax due?
With your federal income tax return, generally April 15, filed electronically through the Department of Revenue. Only people who owe the tax need to file.
How does the capital gains tax work with the new millionaires' tax?
From 2028, Washington's 9.9% tax on income above $1 million gives a credit for capital gains tax paid, so the same gain isn't fully taxed twice. Initiative 645, on the November 3, 2026 ballot, would repeal the millionaires' tax.
Answers summarize RCW 82.87 and Department of Revenue guidance linked on this page and are not tax or legal advice.
Run your numbers
Selling your business?
Selling a Business Calculator
What you'd keep after federal and Washington taxes.
Estimate your net proceedsPlanning your estate?
Estate Tax Calculator
What Washington and federal estate tax could cost your family.
Estimate your estate taxWill you be impacted?
Millionaires' Tax Calculator
Whether Washington's new 9.9% income tax would apply to you.
Estimate your income taxHave employees?
Washington Saves Guide
Whether the state program applies to your business, and how the options compare.
Check if it appliesFor business owners in Kitsap County
A large gain is often a once-in-a-career event: a business interest, a concentrated stock position, or years of investing. How and when it happens can change what Washington takes.
Walters Wealth Management is a family-run practice in Poulsbo. We focus on business owners, and help them plan around Washington's taxes, alongside their CPA and attorney.
Important information about this calculator
This calculator is provided by Walters Wealth Management for general educational purposes only. It produces a simplified, hypothetical estimate of Washington's capital gains tax based solely on the amounts you enter, on RCW 82.87, and on figures published by the Washington Department of Revenue. Washington had not published its 2026 standard deduction or charitable deduction amounts as of October 23, 2026, so 2025 amounts are used.
It assumes the gains you enter are long-term, net of long-term losses, and otherwise taxable unless you identify them as real estate or as qualifying for the family-owned small business deduction. It does not determine whether a sale qualifies for that deduction, whether an asset or entity gain is exempt in part, or your domicile. It applies the $1 million threshold for the additional 2.9% to the total gains you enter, which may differ for spouses or domestic partners who file separately. It treats all investment and business-interest gains as intangible property and does not model gains on tangible personal property, credits for tax paid to other jurisdictions or for business and occupation tax, carryovers, installment-sale reporting, or federal taxes. The timing comparison assumes the same figures in each year and is illustrative only.
Actual results may differ materially. This is not tax, legal, or investment advice. Please consult a qualified tax professional or attorney before making decisions.