Date: February 6, 2026
Washington lawmakers introduced SB 6346, a proposal to create a new 9.9% Washington tax on income above $1,000,000 (as calculated under the bill’s rules), starting in tax year 2028. This is a proposal (not law yet) and it may change during the legislative process.
What the proposal does
If passed, the proposal would apply a 9.9% tax to the amount of income above $1,000,000 (inflation-adjusted).
A key mechanical point: The $1,000,000 threshold applies to married couples/domestic partners the same as to single filers —it’s not “$1,000,000 per person.”
What “income” means here
The bill generally starts with the income figure you already see on your federal return (federal AGI) and then applies Washington-specific adjustments. As with Washington's existing capital gains tax, this tax doesn't apply to income from the sale of real estate.
Common examples that would typically be included:
- W-2 wages and bonuses (including stock compensation that shows up in wages)
- Pass-through income from partnerships and S corporations (K-1 income), whether distributed or not
- Interest, dividends, rents/royalties, and other taxable investment income
Capital gains note: the bill has special coordination rules intended to align certain long-term capital gains with Washington’s existing capital gains tax framework and credits. The details matter, and this is an area most likely to be refined as the bill moves. The intention is that it will only be taxed once.
When it would start
The draft is written to begin with tax year 2028 (meaning the first filings/payments would generally be due in 2029).
Why it may apply in a “one-time” year
This is not about net worth — it’s about income in a particular year. Some taxpayers may exceed the threshold only in a one-time year due to:
- a business sale or large payout
- a large bonus/stock vesting year
- a large income event from an investment or partnership
What we recommend now
Because this is early-stage legislation, the best step is monitoring and modeling:
- If you may have a $1,000,000+ income year, flag it early so we can run scenarios.
- If you’re planning a liquidity event (business sale, major equity vesting, large investment sale), timing could matter depending on how the bill develops.
- Expect revisions and legal challenges; we’ll keep clients updated as the proposal evolves.
Disclaimer: This is a high-level summary of SB 6346 as introduced as of February 4, 2026. It is not legal advice, and the proposal may be amended substantially before any final vote.