Updated October 5, 2026. Quick answer: No, not today. The Department of Revenue says “Washington does not currently have an individual income tax”, so annuity payments add no Washington income tax. A new 9.9% tax on adjusted gross income above $1 million begins January 1, 2028.
How Washington treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Not taxed by the state today |
| New income tax | 9.9% on adjusted gross income above $1 million, beginning January 1, 2028 (Senate Bill 6346) |
| Annuities under the new tax | The pages read do not say how annuity income is counted |
A $24,000 example
A stream of $24,000 in annuity payments adds $0 of Washington income tax today, and it is far below the $1 million line the new tax uses. Federal tax on the payments still applies.
What changes in 2026
The 2026 Legislature set a new income tax that begins January 1, 2028, with the first return due in 2029; nothing changes for 2026.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether Washington taxes pensions, how Washington taxes retirement income, annuity income tax by state, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- Income tax (Washington Department of Revenue): https://dor.wa.gov/taxes-rates/income-tax
- Frequently asked questions about income tax (Washington Department of Revenue): https://dor.wa.gov/taxes-rates/income-tax/frequently-asked-questions-about-income-tax
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.