What's the tax on a $250,000 long-term capital gain in Washington?

Approximately $47,000 total. Federal LTCG: $37,500. NIIT at 3.8%: $9,500. Washington capital gains tax (7% above $270k threshold): $0.

Short-term vs long-term?

If the same $250,000 gain were short-term (held under 12 months), it would be taxed as ordinary income at up to 37% federal plus state, coming to approximately $96,984. That's $49,984 more than the long-term number. Holding past the 12-month mark usually saves meaningful money.

Does Washington tax capital gains the same as ordinary income?

Washington has no wage income tax but imposes a 7% capital gains tax on long-term gains above approximately $270k per year. That's the only state-level exposure.

If the gain is on Qualified Small Business Stock held more than five years, up to the greater of $10M or 10× basis may be excluded from federal tax under IRC §1202. Washington has no state tax regardless, so QSBS treatment only affects the federal side.

How much tax on a $250,000 capital gain in Washington?

Long-term vs short-term

A long-term capital gain (held 12+ months past the basis-setting event) gets preferential federal rates: 0%, 15%, or 20% depending on total taxable income, plus 3.8% NIIT for MAGI above $200k single. Short-term gains are taxed at ordinary rates up to 37% federally, plus state. For this $250,000 gain, the short-term total would run approximately $96,984, compared with $47,000 long-term. The difference is roughly $49,984.

Washington's treatment

Washington's 2022 capital gains tax applies 7% to long-term gains above approximately $270,000 per year. Below the threshold, there is no state tax. This page assumes you are above the threshold.

Cost basis considerations

For RSU shares, basis equals the vest-date closing price. For ISO shares (qualifying disposition), basis equals strike plus any ordinary-income component at exercise. For ESPP shares, basis depends on whether the sale is a qualifying or disqualifying disposition. These basis rules materially affect whether a reported gross sale amount is mostly gain or mostly return of basis.

Frequently asked

What's the tax on a $250,000 long-term capital gain in Washington?: Approximately $47,000 total. Federal LTCG: $37,500. NIIT at 3.8%: $9,500. Washington capital gains tax (7% above $270k threshold): $0.
Short-term vs long-term?: If the same $250,000 gain were short-term (held under 12 months), it would be taxed as ordinary income at up to 37% federal plus state, coming to approximately $96,984. That's $49,984 more than the long-term number. Holding past the 12-month mark usually saves meaningful money.
Does Washington tax capital gains the same as ordinary income?: Washington has no wage income tax but imposes a 7% capital gains tax on long-term gains above approximately $270k per year. That's the only state-level exposure.
What about QSBS?: If the gain is on Qualified Small Business Stock held more than five years, up to the greater of $10M or 10× basis may be excluded from federal tax under IRC §1202. Washington has no state tax regardless, so QSBS treatment only affects the federal side.

Educational estimate · 2025 brackets · Single filer · Long-term hold · $250k other ordinary income · Not tax advice

Long-term vs short-term

Washington's treatment

Cost basis considerations

Frequently asked

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