Washington Income Tax: None Until 2028, Then 9.9 Percent Above $1 Million

Until 2028. Washington does not levy a personal income tax. The Department of Revenue: "Washington does not currently have an individual income tax." Military retired pay, a Survivor Benefit Plan annuity, VA disability compensation, VA pension and Thrift Savings Plan distributions are therefore not taxed by Washington, and there is no exclusion to claim and no state return to file. From January 1, 2028. Chapter 238, Laws of 2026 (ESSB 6346, signed March 30, 2026, effective June 11, 2026) imposes a tax, "Beginning January 1, 2028", of "9.90 percent multiplied by an individual's Washington taxable income" (section 201). Washington base income is federal adjusted gross income with the act's modifications, and section 314 then allows "a standard deduction of $1,000,000 per individual, or in the case of spouses or state registered domestic partners, their combined standard deduction is $1,000,000, regardless of whether they file joint or separate returns", indexed for inflation (section 316). The Department of Revenue: the tax applies to "individuals and married couples filing jointly with annual adjusted gross income exceeding $1 million", and "The first returns for the new tax will be due in April 2029." What that means for a veteran. The act has no subtraction for military retired pay, SBP annuities or TSP withdrawals, so they count toward the $1 million like any other income in federal adjusted gross income. VA disability compensation and VA pension are not in federal adjusted gross income, and section 301 keeps out "an item of income ... excluded from federal adjusted gross income", so they stay untaxed. Below the standard deduction, which is nearly every household, nothing changes; the Department will publish filing guidance before 2028. Two taxes already in force. Washington's capital gains excise tax (RCW 82.87.040) takes 7 percent of an individual's long-term capital gains above its own standard deduction since 2022, plus 2.9 percent of gains above $1,000,000 since 2025; the new act subtracts those gains from the income tax base so they are not taxed twice. And Washington has an estate tax, which chapter 421, Laws of 2025 changed to a $3,000,000 exclusion with top rates up to 35 percent; it has no veteran exemption. Washington raises most revenue through the retail sales tax, the business and occupation tax and property tax, which is why the property tax exemption in this catalog matters more here than in a state with a broad income tax. Because there is no return today, the property tax programmes' income tests are administered by the county assessor from documents the applicant supplies, so keep the federal return, VA award letters and 1099-R forms to hand.