Your estimate will appear here
Enter your income and watch it measured against Washington's new $1 million line.
The full breakdown
Working with a CPA or tax attorney?
Send them this calculator. Your numbers aren't included; they'll enter their own. Or download your breakdown as a PDF to bring to the conversation.
How this estimate was calculated
One deduction per household
Married couples and domestic partners share a single $1,000,000 deduction, whether they file jointly or separately.
Real estate gains
Long-term gains on real estate are generally excluded, because they aren't subject to Washington's capital gains tax.
Nonresidents and movers
Nonresidents pay on Washington-source income, and the $1 million deduction shrinks by the share of total income that comes from Washington. Part-year residents also count everything earned while living here.
Status
Effective January 1, 2028. Initiative 645 on the November 3, 2026 ballot would repeal it, and a court challenge is pending.
Washington's millionaires' tax at a glance
Sources: ESSB 6346 House Bill Analysis and fiscal note; Washington Department of Revenue; Washington Secretary of State certification of Initiative 645, as reported.
Washington millionaires' tax on example incomes
Income from wages and business earnings only, for a single filer or a married couple (who share one $1 million deduction), starting in 2028.
| Annual income | Estimated tax | Effective rate |
|---|---|---|
| $1,200,000 | $19,800 | 1.65% |
| $1,500,000 | $49,500 | 3.30% |
| $2,000,000 | $99,000 | 4.95% |
| $3,000,000 | $198,000 | 6.60% |
| $5,000,000 | $396,000 | 7.92% |
| $10,000,000 | $891,000 | 8.91% |
With long-term capital gains: how the credit works
| Wages | Capital gains | 9.9% tax before credit | Capital gains tax credit | Estimated tax |
|---|---|---|---|---|
| $800,000 | $1,000,000 | $79,200 | − $50,540 | $28,660 |
| $500,000 | $3,000,000 | $247,500 | − $240,478 | $7,022 |
| $2,000,000 | $2,000,000 | $297,000 | − $141,478 | $155,522 |
Calculated from ESSB 6346 as enacted and Washington Department of Revenue capital gains figures.
How does this calculator work?
It follows the structure of ESSB 6346 as described in the Legislature's own bill analysis.
Adds up your income
Wages, business income, and other income that counts toward federal adjusted gross income.
Handles capital gains
Removes long-term gains, then adds back gains subject to Washington's capital gains tax. Real estate gains stay out.
Applies the $1 million line
Subtracts one $1,000,000 standard deduction per household, prorated for part-year residents and nonresidents, and applies 9.9% to the rest.
Applies the credit
Subtracts the Washington capital gains tax you'd pay on the same gains, up to the amount of the new tax.
Verify it yourself
Every rule here comes from the Legislature's analysis of ESSB 6346 and the Washington Department of Revenue.
Questions business owners ask
What is Washington's millionaires' tax?
ESSB 6346, signed in March 2026, creates a 9.9% tax on Washington taxable income above a $1 million standard deduction. It takes effect January 1, 2028, with first returns and payments due in April 2029.
Who would pay it?
Individuals whose Washington taxable income exceeds $1 million in a year. It applies to Washington residents and to nonresidents with Washington-source income, such as income from a Washington business. Businesses themselves do not pay it.
Do married couples get a $2 million deduction?
No. Spouses and domestic partners share one combined $1 million standard deduction, whether they file jointly or separately.
What income counts?
The calculation starts with federal adjusted gross income, which includes wages, business income from pass-through entities, interest, and dividends, then applies Washington-specific modifications.
How are capital gains treated?
Long-term capital gains are first removed from federal adjusted gross income. Gains subject to Washington's capital gains tax are then added back, along with that tax's standard deduction. A non-refundable credit is allowed for Washington capital gains tax paid.
Are real estate gains taxed?
Long-term gains on real estate are generally excluded, because real estate is exempt from Washington's capital gains tax and long-term gains are only added back to the extent that tax applies to them.
How does the tax work if I move or live outside Washington?
Part-year residents count all income earned while a resident, plus Washington-source income earned while a nonresident. Nonresidents count only Washington-source income, such as pay for work done in Washington on more than five days a year and income from Washington business activity. For both, the $1 million deduction is multiplied by Washington base income divided by total federal adjusted gross income. A nonresident with $600,000 of Washington income out of $5 million total gets a $120,000 deduction and would owe about $47,520.
Will selling my business trigger this tax?
A large sale can push income above $1 million, but the credit for Washington capital gains tax paid can offset much or all of the new tax on the gain. Owners with high ordinary income in the same year are more likely to owe.
Is the tax final?
It is enacted law with an effective date of January 1, 2028. Initiative 645, which would repeal it, is on the November 3, 2026 ballot, and a lawsuit challenging its constitutionality is pending. Under the law, if a court invalidates the tax, the entire act is void.
When would the first payments be due?
The tax applies to income received starting January 1, 2028. The first returns and payments are due in April 2029.
How can business owners prepare?
Common planning topics include the timing of income and sales, how compensation and distributions are structured, and coordinating with Washington's capital gains tax. These are decisions to make with your CPA and attorney.
Are there deductions or credits besides the $1 million deduction?
Yes. Taxpayers may deduct charitable gifts of up to $100,000 per household to organizations principally managed in Washington. Credits are allowed for Washington capital gains tax paid on the same gains, for B&O or public utility tax paid on the same income, and for income tax paid to other states. Pass-through entities may also elect to pay the tax at the entity level. This calculator models the charitable deduction, the capital gains and B&O credits, and the prorated deduction for part-year residents and nonresidents.
Answers summarize the official sources linked on this page and are not tax or legal advice.
More Washington tax calculators
For business owners in Kitsap County
For most Kitsap business owners, the new tax won't apply in an ordinary year. It matters most in the years with unusually high income, such as a strong distribution year or the sale of a business, which is exactly when advance planning has the most room to help.
Walters Wealth Management is a family-run practice in Poulsbo built for business owners. We help owners plan around these numbers well before they matter, 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 based solely on the amounts you enter and on ESSB 6346 as enacted, as described in the Legislature's bill analysis and fiscal note, and on Washington Department of Revenue capital gains figures.
It does not model every Washington modification to federal adjusted gross income, the detailed allocation and apportionment rules for nonresidents and part-year residents (it relies on the Washington income you enter and prorates the standard deduction by its share of the total income you enter), credits other than those for Washington capital gains tax and B&O tax, the pass-through entity election, credits for tax paid to other states, adjustments for bond interest, carryovers, or future inflation adjustments. It uses the 2025 Washington capital gains standard deduction. It applies the charitable deduction in full for part-year residents and nonresidents and treats any capital gains you enter as subject to Washington's capital gains tax. The tax is scheduled to take effect January 1, 2028; its status may change as a result of Initiative 645 on the November 3, 2026 ballot and pending litigation. This page does not take a position on the tax or the initiative.
Actual results may differ materially. This is not tax, legal, or investment advice. Please consult a qualified tax professional or attorney before making decisions.