Washington Millionaires' Tax: Five Moves to Make
August 28, 2026
- Author:
- Scott Smith CPA, CFP®, PFS, CGMA, CRPS
On January 1, 2028, Washington State will implement one of the most significant tax changes affecting affluent residents in decades: a 9.9% tax on household income exceeding $1 million. If you're a high earner in Washington or considering the state as home, this isn't something to watch from the sidelines. The clock is ticking, and the decisions you make in the coming months could have profound implications for your wealth and financial strategy.
Read our guide to learn more about critical timelines and planning steps to take.
Why This Matters Now
While the tax itself takes effect in 2028, the planning window is closing. 2027 represents your last full calendar year to evaluate and execute strategies that could meaningfully reduce your tax exposure. For business owners, investors, and those with significant assets, the timing of income recognition, the structure of your business interests, and even where you're domiciled can make substantial differences under the new tax landscape.
Five Critical Planning Moves
The new tax law creates several planning considerations that many high earners haven't yet addressed:
- Income Timing — Understanding how and when income is recognized in 2027 versus 2028 can affect your total tax bill.
- Business Structure Options — Partnerships, S-corps, and LLCs may handle the new tax differently. Your current structure might not be optimal under the new rules.
- Startup Exits and Qualified Small Business Stock — Certain business transitions may receive preferential treatment—but only if structured correctly beforehand.
- Existing Arrangements — Business agreements, trusts, and charitable plans established before 2028 may need updating to account for the new tax environment.
- Relocation Decisions — For those with flexibility, state residency itself becomes a strategic financial decision. Moving—or not moving—warrants careful analysis based on your specific situation.
The Cost of Waiting
Tax planning isn't something you should rush. But it's also not something you should delay. The most effective strategies are often those implemented with runway—time to evaluate options, coordinate with your team, and execute without pressure. As we move deeper into 2026 and 2027, that window narrows.
What to Do Next
The stakes are high, and the details matter. A comprehensive guide to Washington's millionaires tax—one that walks through these five planning considerations alongside the actual tax law provisions that often surprise high earners—can help you understand your options and take action.
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ESSB 6346 was signed into law on March 30, 2026 (Ch. 238, Laws of 2026). The law is subject to a pending constitutional challenge (Petter v. State, Klickitat County Superior Court). All strategies should be evaluated in the context of your specific financial situation. Please consult with your advisory team before taking action.