Does Washington Tax Social Security or Retirement Income?

Washington does not tax your retirement income today. The state has no individual income tax, so Social Security, pensions, IRA withdrawals, and 401(k) distributions all escape state tax. A new state income tax is coming, but it does not take effect until January 1, 2028, and even then the 9.9 percent rate reaches only annual adjusted gross income exceeding $1 million.1 The other wrinkle is a capital gains tax that does not touch retirement accounts.

This guide covers what Washington retirement income tax means, the capital gains rule that does not apply to you, and what you still owe.

In This Guide

• Does Washington Tax Social Security or Retirement Income?
• Washington Retirement Income Tax at a Glance
• Washington Retirement Income Tax: How It Works
• The Capital Gains Tax Wrinkle
• What You Still Pay in Washington
• Frequently Asked Questions
• Next Steps

Does Washington Tax Social Security or Retirement Income?

Washington taxes none of your retirement income.1 There is no state income tax today, no state return, and no state withholding on a pension payment.

The Washington Department of Revenue says the state does not currently have an individual income tax. Beginning January 1, 2028, a new 9.9 percent tax will apply to individuals and to married couples filing jointly with annual adjusted gross income exceeding $1 million, enacted by the 2026 Legislature, with the first returns due in April 2029.1 So whether you ask about pensions, Social Security, or 401(k) withdrawals, the state answer today is the same. Washington taxes none of it, and a retiree whose annual adjusted gross income stays under $1 million is not affected by the 2028 tax either.1

People sometimes hear about Washington's capital gains tax and assume it reaches their retirement money. It does not. We cover that below.

Washington Retirement Income Tax at a Glance

Here is how each common income source is treated at the state level.

Every state-tax entry reads "None," because Washington does not currently have an individual income tax. That holds through 2027; the 9.9 percent tax that begins January 1, 2028 reaches only annual adjusted gross income exceeding $1 million.1

Washington Retirement Income Tax: How It Works

Mostly, it does not. Washington has no individual income tax to apply, so no type of retirement income is exempt only up to a limit; there is no income tax to limit.1 The one change on the horizon is the 9.9 percent tax that starts January 1, 2028 on annual adjusted gross income exceeding $1 million, with the first returns due in April 2029.1

A military pension, a teacher's pension, a corporate 401(k), a required minimum distribution, a Social Security check: Washington taxes all of them at zero.1 There is no Washington retirement exclusion to claim and no senior credit to file, because you do not owe state income tax in the first place. You do not even file a Washington income tax return.

If you are relocating, confirm your residency cleanly. Washington taxes a resident's retirement income at zero, but a former state may still tax income earned while you lived there. Get a Washington driver's license, register to vote, and document the move so your old state cannot keep billing you.

The Capital Gains Tax Wrinkle

Washington levies an excise tax on the sale or exchange of long-term capital assets, and it confuses a lot of retirees.1 Since tax year 2025 the rate has been tiered: the first $1 million of your Washington capital gains is taxed at 7 percent, and the part above $1 million carries an additional 2.90 percent on top of the 7 percent, which the Department of Revenue's rate table states as 9.9 percent on taxable income from $1,000,001 and up.1

Do not confuse that 9.9 percent with the 9.9 percent income tax everywhere else in this guide. They are two different taxes that happen to share a rate. The capital gains tier applies now, to the profit on assets you sell. The income tax starts January 1, 2028 and applies to adjusted gross income.1 Here is the plain version: neither one reaches your retirement income.

The tax carries a standard deduction, which was $278,000 for 2025, up from $270,000 for 2024 and adjusted for inflation annually. The Department of Revenue states that deduction per year per individual, married couple, or domestic partnership, so a married couple shares one deduction and does not get one each.1 More importantly, it exempts assets held in certain retirement accounts, including 401(k)s and IRAs, and it exempts the sale of real estate.1 So selling investments inside your IRA, taking a distribution, or selling your home does not trigger it.

In practice, a typical retiree living on Social Security, pensions, and retirement-account withdrawals never owes this tax. It reaches a retiree only on the sale of taxable stock, a business, or other investments held outside a retirement account, and only beyond the standard deduction.1 If you are selling a business or a large taxable portfolio, run the tier: the first $1 million of Washington capital gains is taxed at 7 percent, and everything past $1 million at 9.9 percent.1

What You Still Pay in Washington

Zero state income tax on your retirement income does not mean zero taxes.

Federal income tax. The IRS still taxes pension income, traditional IRA and 401(k) withdrawals, and often part of Social Security benefits. Retirees in Washington still owe federal income tax; moving here zeroes out your state bill and leaves your federal one untouched.1

Other state and local taxes. Washington funds itself without an income tax, so the rest of a retiree's state and local bill lands elsewhere, including property tax on a home. See our senior property tax relief guide for the exemptions and deferrals Washington offers older homeowners.

For families weighing how this income will cover care, start with our guide on how to pay for senior care, our framework for building a senior care funding plan, and our overview of retirement accounts for care.

Next Steps

• If you are moving to Washington, establish clean residency so your former state cannot keep taxing you.
• If you own a home, look into Washington's senior property tax exemption and deferral programs.
• Do not worry about the capital gains tax unless you have large gains on investments held outside a retirement account; the excise tax exempts assets held in certain retirement accounts and real estate.1 If you do have gains that large, note that the rate rises from 7 percent to 9.9 percent past $1 million.
• Plan your care funding. Read our guide to paying for senior care and retirement accounts for care.

Learn More

Find personalized help planning retirement income for senior care at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.