Washington State Tax Guide: What You'll Pay in 2024

Posted on 03/11/24 by Emily Charrier

Washington state is one of only nine states in the country without a personal income tax, and property taxes are capped at 1 percent of a home’s value. But the combined average sales tax is the fourth highest in the nation, according to the Tax Foundation.

The big picture:

  • Income tax: 0 percent
    There is no personal income tax in Washington.
  • Property tax: 0.98 percent of a home’s assessed market value (average)
    Real estate taxes vary depending on where you live, but the average tax rate in Washington state was 0.98 percent in 2022, according to the Washington Department of Revenue.
  • Sales tax: 9.38 percent (average combined state and local)
    The state sales tax rate is 6.5 percent, but some counties charge a local sales tax of up to 4.1 percent. The average combined state and local sales tax rate is 9.38 percent, according to the Tax Foundation.
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Getty/AARP

How is income taxed in Washington?

The Evergreen State does not have a personal income tax.

Watch the video below to learn how to identify your 2023 federal income tax brackets.

What Is My Tax Bracket?

Are pensions or retirement income taxed in Washington?

No. Retirement benefits — including income from Social Security, 401(k) plans and IRAs — are not taxed in Washington state.

AARP's retirement calculator can help you determine if you are saving enough to retire when — and how — you want.

What about investment income?

Washington has a 7 percent tax on long-term capital gains over $262,000. Assets covered by the tax include stocks, bonds and other investments held longer than a year. Real estate sales and investments through retirement savings accounts are exempt. The tax was implemented in 2022 and upheld by the Washington state Supreme Court in 2023 following a legal challenge. It applies to residents living in the state for more than 183 days during the tax year.

Does Washington tax Social Security benefits?

No, but you may pay federal taxes on a portion of your Social Security benefits, depending on your income. Up to 50 percent of your benefits will be taxed if you file an individual federal tax return and make between $25,000 and $34,000 in total income — or if you file jointly and as a couple make $32,000 to $44,000 in total income. And up to 85 percent of your benefits will be taxed by the federal government if your total income is more than $34,000 individually or $44,000 as a couple.

AARP's Social Security calculator can assist you in determining when to claim and how to maximize your Social Security benefits.

How is property taxed in Washington?

Property tax is managed by your county and based on the assessed fair market value of your home. Your county’s assessor’s office will update the value of properties each year and must do physical inspections at least once every six years. The state constitution caps the property tax rate at 1 percent of a home’s market value. The cap does not include special local taxes approved by voters.

The state offers property tax breaks for some seniors and disabled residents. Scroll down for more information.

Visit your county assessor’s website to learn more about property taxes, how to file for an exemption or how to contest your home’s valuation.

What about sales tax and other taxes?

  • Sales tax: There’s a 6.5 percent state tax on many, but not all, consumer goods and services. Combined local taxes (city and county) are capped at 4.1 percent. The average combined rate is 9.38 percent, giving Washington the fourth-highest sales tax rate in the nation, according to the Tax Foundation. Enter your address to find your local tax rate on the state’s Department of Revenue website.
  • Prescription drugs and most groceries are exempt from sales tax, although prepared foods, dietary supplements and soft drinks are taxable. Hearing aids and lenses for glasses are also tax-exempt with a valid prescription. Find a list of nontaxable items on the Washington Department of Revenue’s website.
  • Use tax: Washington’s use tax applies to purchases that are not subject to sales tax. For example, items purchased from an individual (such as at a garage sale) or bought in a state that does not charge a sales tax would be subject to the use tax if the items are used in Washington state. You’ll also owe a use tax for purchases made online or by mail if the seller did not collect Washington sales tax. The use tax rate is the same as your state and local sales tax and can be paid through the Department of Revenue’s website.
  • Vehicles: A tax of 0.3 percent is added to the local sales tax rate when purchasing a vehicle.
  • Gas and diesel: The state taxes gasoline at 49.4 cents per gallon. This tax is paid by the vendor but included in the price at the pump.
  • Alcohol: Washington consumers pay two different taxes on liquor sold in its original package — a spirits sales tax of 20.5 percent and a spirits liter tax of $3.7708 per liter. The state collects excise taxes of 26 cents a gallon on beer and 87 cents a gallon on wine. Excise taxes are paid by the vendor but are typically passed on to the consumer.

Will I or my heirs have to pay inheritance and estate tax in Washington?

Although there is no tax on inheritances in the Evergreen State, Washington is one of just 12 states (plus Washington, D.C.) with an estate tax. The tax kicks in for estates worth more than $2.193 million. The tax ranges from 10 percent for the first $1 million after allowable deductions, to a maximum of 20 percent on estates of $9 million or more after allowable deductions. Surviving spouses are exempt but may still need to file an estate tax return.

Are there any tax breaks for older Washington residents?

Two state programs provide property tax breaks for older homeowners and homeowners with disabilities who meet certain income requirements. A 2023 law raised the income threshold needed to qualify. Income requirements vary depending on your county.

  • Property Tax Deferral Program: If you are 60 or older or unable to work because of a disability, you may qualify for the state’s property tax deferral program, allowing you to defer some or all property taxes on your primary residence. Deferrals must be repaid with interest when the home is sold, if the homeowner dies or if the home is no longer used as a primary residence.
  • Property Tax Exemption Program: The state also offers a property tax exemption program for eligible homeowners who are 61 or older or unable to work because of a disability.  Eligible individuals can have their home’s assessed value frozen and avoid paying special state and local property taxes.

Surviving spouses of an individual in either program may qualify to continue receiving tax relief if they are 57 or older. For more information on either program, including how to apply, visit the Washington state Department of Revenue’s website or contact your county assessor’s office.

Surviving spouses of disabled veterans may also qualify for property tax assistance.

Can I qualify for Washington’s tax benefits and breaks as a part-time resident?

You must live in Washington state for at least six months to qualify for state tax breaks or assistance programs. Some ways to establish residency include registering to vote, obtaining a state-issued ID or driver’s license, or renting or buying a place to live.

If you also own a home in another state, you should review that state’s residency rules as well.

Are military benefits taxed in Washington?

Because Washington does not have a personal income tax, military pensions and active duty pay are not taxed.

What is the deadline for filing Washington state taxes in 2024?

Washington residents do not need to file a state tax return because the state does not have a personal income tax. Your federal return is due April 15, 2024.

For help estimating your annual income taxes, use AARP's Tax Calculator.

Emily Charrier has 20 years of community journalism experience, serving as editor and publisher of the Sonoma Index-Tribune and Petaluma Argus-Courier. She is also the board chair of the California News Publishers Association.

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This story is provided by AARP Washington. Visit the AARP Washington page for more news, events, and programs affecting retirement, health care, and more.

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