Updated October 4, 2026. Quick answer: Not as an income tax, but yes as an excise tax on long-term gains. The Department of Revenue says “Washington’s long-term capital gains tax has a tiered rate”: 7% on the first $1,000,000 of taxable gains and 9.9% above that, after a $278,000 standard deduction for 2025. Real estate is exempt.
Selling your home? How the state taxes the profit, from its own tax documents: Does Washington tax the profit from selling your home?.
The same question for dividends and interest: does Washington tax dividends and interest.
How Washington treats capital gains
| Item | What the documents say |
|---|---|
| Treatment | Excise tax on long-term capital gains only (assets held more than one year) |
| Rates | 7% on the first $1,000,000 of taxable Washington capital gains, 9.9% above $1,000,000 (tiers began with tax year 2025) |
| Standard deduction | $278,000 for 2025; $270,000 for 2024; adjusted for inflation each year |
| Exempt | Real estate and “Assets held in certain retirement accounts” |
| Due | April 15 after the tax year |
A $50,000 long-term gain
A $50,000 long-term gain is below the $278,000 standard deduction for 2025, so the excise tax on it is $0 if it is your only Washington capital gain that year.
As a computed illustration, a year with $378,000 of long-term gains leaves $100,000 taxable after the $278,000 deduction, and 7% of that is $7,000.
What changes in 2026
Starting with tax year 2026 a taxpayer may prepay: for a return due April 15, 2027, payment can be made beginning Oct. 15, 2026. The 2026 standard deduction is not printed on the pages read.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.
Related: whether Washington taxes pensions, how Washington taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.
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Answer againSources
- Capital gains tax: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax
- New tiered rates for Washington’s capital gains tax (special notice): https://dor.wa.gov/forms-publications/publications-subject/special-notices/new-tiered-rates-washingtons-capital-gains-tax
- Frequently asked questions about Washington’s capital gains tax: https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax/frequently-asked-questions-about-washingtons-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.