Updated October 7, 2026. Quick answer: No, not today. The Washington Department of Revenue says “Washington does not currently have an individual income tax”. A new tax is coming: “Beginning Jan. 1, 2028, a new 9.9% income tax will apply” to “annual adjusted gross income exceeding $1 million”, so a $30,000 TSP withdrawal is not taxed by the state in 2026.
Washington TSP withdrawal tax treatment at a glance
| Item | What the documents say |
|---|---|
| TSP withdrawals | Not taxed by Washington: the documents read describe no individual income tax that applies to a withdrawal |
| FERS annuity | The documents read do not treat a FERS annuity differently from a TSP withdrawal; with no individual income tax, neither is taxed by Washington |
| Rate or limit printed | No rate: no individual income tax |
| Where it is reported | Nothing to report on a Washington return |
| Source | Washington Department of Revenue |
What the Washington documents say
The Department’s income tax page and its frequently asked questions both say the state has no individual income tax today. The page then describes the change: “Beginning Jan. 1, 2028, a new 9.9% income tax will apply” to “annual adjusted gross income exceeding $1 million”, and it says the Legislature “established this tax through Senate Bill 6346”.
The pages read do not say whether the 2028 tax would reach retirement withdrawals; a TSP withdrawal counts only if it is part of adjusted gross income above that threshold.
A worked example at $30,000 of withdrawals
An illustration, not a return: a Washington resident who takes $30,000 from the TSP in 2026 owes $0 of Washington individual income tax on it, on the documents read. Federal income tax still applies and is outside this page.
If you moved to Washington or left it
The rules above are Washington’s own, for a resident. Federal law limits what a state you have left may do: “No State may impose an income tax on any retirement income” of someone who is not a resident or domiciliary of that state, as 4 U.S.C. 114(a) puts it. The statute defines retirement income by reference to plans described in the Internal Revenue Code; this page does not decide whether a particular TSP payment meets that definition. If you moved during the year, check each state’s page and return. See CMG’s TSP withdrawal options and FERS, TSP and Social Security sequencing pages for the federal side.
What changes in 2026
Washington: “Beginning Jan. 1, 2028, a new 9.9% income tax will apply”. Nothing changes for 2026.
What the documents do not say
- The Department’s pages do not address retirement withdrawals under the 2028 tax, and they do not name the TSP.
Common mistakes
- Assuming the absence of a Washington income tax removes the federal tax on a TSP withdrawal; it does not.
- Assuming Washington’s 2028 income tax applies to ordinary-sized withdrawals; the Department describes it as applying to adjusted gross income over $1 million.
- Assuming the answer for one state applies to another, or that the state answer changes the federal tax on the withdrawal.
Related: TSP withdrawal options, state tax on TSP withdrawals, Washington retirement taxes, how Washington taxes pensions, and how Washington taxes 401(k) and IRA withdrawals.
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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: https://dor.wa.gov/taxes-rates/income-tax/frequently-asked-questions-about-income-tax
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Code, GovInfo): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.