Updated October 4, 2026. Quick answer: No. Washington does not tax 401(k) or IRA withdrawals as income: the Department of Revenue says “Washington does not currently have an individual income tax”. Federal tax on the withdrawal still applies. A 9.9% tax on adjusted gross income over $1 million starts in 2028, so it does not reach 2025 or 2026.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Washington tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Washington tax 403(b) and 457(b) withdrawals.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Washington tax withholding on IRA and 401(k) withdrawals.
Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Washington tax TSP withdrawals?.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Washington have an inheritance tax?.
Contributing to an HSA? How the state taxes it, from its own tax documents: Does Washington tax HSA contributions?.
What Washington does with 401(k) and IRA withdrawals
Washington’s capital gains excise tax is a separate tax. The state code exempts retirement accounts from it: the statute lists “an individual retirement account or individual retirement annuity described in Title 26” and “retirement savings account under Title 26 U.S.C. Sec. 401(k)” among exempt assets.
| Item | What the documents say |
|---|---|
| Treatment | Not taxed by the state in 2025 or 2026: no individual income tax |
| State rate on a withdrawal | None |
| Source | Washington Department of Revenue; Revised Code of Washington |
A $40,000 withdrawal
A $40,000 withdrawal from a traditional 401(k) or IRA adds $0 of Washington income tax. Your federal return still includes the withdrawal.
What changes in 2026
The Department’s page says “a new 9.9% income tax will apply to individuals” with “annual adjusted gross income exceeding $1 million”, starting January 1, 2028 with the first return due in 2029. No change affects tax years 2025 or 2026.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Washington taxes pensions, how Washington taxes retirement income, whether Washington taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for retirement withdrawals
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans your withdrawals
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Income tax: https://dor.wa.gov/taxes-rates/income-tax
- RCW 82.87.050 Exemptions (capital gains excise tax): https://app.leg.wa.gov/rcw/default.aspx?cite=82.87.050
- RCW 82.87.040 Tax imposed: Long-term capital assets: https://app.leg.wa.gov/rcw/default.aspx?cite=82.87.040
- Capital gains tax: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax
Sources: the primary documents linked above, read on October 4, 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.