Roth Conversion in Washington

A Roth conversion in Washington faces $0 in Washington state income tax in 2026, because Washington has no individual income tax on ordinary income (Source: Tax Foundation, 2026). That is the plain answer for retirees today, but a signed law changes the math for high earners on January 1, 2028.

Does Washington tax a Roth conversion? The rate today and after 2028

No. A Roth conversion is ordinary income, and Washington imposes no individual income tax on ordinary income in 2026, so the conversion faces $0 Washington state tax at any dollar amount (Source: Tax Foundation, taxfoundation.org/location/washington, 2026). No state exclusion is needed because there is no state income tax to be excluded from. Federal tax on the converted amount is still owed in full.

Washington is one of the nine states with no broad individual income tax (AK, FL, NV, NH, SD, TN, TX, WA, WY). For a resident converting a traditional IRA or 401(k) to a Roth today, the entire conversion amount escapes state income tax, whether it is $50,000 or $5 million, and the only tax owed is federal, at rates up to 37% for 2026. That zero-state-tax reality is why a new Washington income tax, signed in 2026 and effective for tax years beginning on or after January 1, 2028, creates the planning question our Roth conversion planning service is built to model.

Washington state 9.9% income tax in 2028: what ESSB 6346 does

On March 30, 2026, Governor Bob Ferguson signed ESSB 6346, enacting Washington’s first personal income tax: a 9.9% levy on household income above $1 million, paired with a $1 million standard deduction (Source: Morgan Lewis, “Washington Adopts 9.9% Tax on Residents Earning Over $1 Million,” March 2026; EY Tax News 2026-0852). It is effective for tax years beginning on or after January 1, 2028, with collections beginning in 2029.

The statute contains no carve-out for retirement income. Once it is in force, a Roth conversion completed in 2028 or later counts as ordinary income that flows into the Washington tax base. Converting $2 million in a single post-2028 year, on top of income that already used up the deduction, could expose most of that conversion to the 9.9% rate at the state level. That is a change from the $0 result available in 2026 and 2027.

The law is signed but not yet collecting, and it faces active legal challenges described further down this page.

Washington’s $1 million income tax standard deduction, explained

Under ESSB 6346, Washington’s new income tax applies only to household income above a $1 million standard deduction (Source: K&L Gates, March 2026; EY Tax News 2026-0852, March 2026). The $1 million figure is measured per household, so a married couple is treated as one household against that amount rather than doubling it to $2 million. Income at or below $1 million is not reached by the 9.9% rate once the tax is in force in 2028.

This threshold is what makes the tax a high-income and large-conversion issue rather than a broad retiree tax. A retiree drawing a $60,000 pension and Social Security is far below the deduction and would owe nothing under the new law even after 2028. A resident who realizes $3 million of ordinary income in one year, including a large conversion, sits well above it. Because a lump-sum conversion or a required minimum distribution can push a single year’s income over $1 million, spreading conversions across years matters more once the deduction and rate exist, and modeling exactly where a household lands against the threshold is the core of the planning.

Roth conversion before Washington’s income tax deadline: the pre-2028 window

Because ESSB 6346 takes effect January 1, 2028, any Roth conversion a Washington resident completes on or before December 31, 2027 is taxed by Washington at $0, while conversions in 2028 and later can face 9.9% on the portion of household income above the $1 million deduction (Source: Tax Foundation, 2026; Morgan Lewis, March 2026). Federal tax applies in every year regardless.

Illustrative figures show the size of the state-level difference for large balances, assuming the tax survives the challenges below and the full amount is realized in one post-2028 year:

• A $3 million conversion stacked on $500,000 of other income equals $3.5 million of income. Above the $1 million deduction, that is $2.5 million taxed at 9.9%, or about $247,500 of Washington tax, if done in 2028 or later. Done in 2026 or 2027, the Washington tax is $0.
• A $5 million conversion, again realized in a single post-2028 year above the deduction, can carry $300,000 or more of Washington tax at 9.9%. The same conversion completed before 2028 carries $0 Washington tax.

These numbers are illustrative, not a projection, and they ignore the possibility that the tax is repealed or struck down before it applies. The federal bill is unchanged either way, so a break-even analysis has to weigh the federal cost paid now against the state tax possibly avoided later. See also the multi-state overview at Roth conversion state taxes.

Does Washington tax 401(k) and IRA withdrawals?

No. Distributions from traditional IRAs, 401(k)s, and other qualified plans are entirely untaxed at the Washington state level in 2026, because Washington has no individual income tax (Source: Tax Foundation, taxfoundation.org/location/washington, 2026). There is no separate “retirement-income exclusion” statute in Washington, and none is needed, unlike states such as Pennsylvania or Illinois that exclude retirement income only because they otherwise tax income.

Required minimum distributions, which begin at age 73 for most current retirees under federal rules, are likewise untaxed by Washington today. The 2028 caution is the same as for conversions: a large RMD or lump-sum withdrawal that pushes a household above the $1 million deduction could face the new 9.9% rate once ESSB 6346 is in force. Qualified Roth distributions are not included in adjusted gross income, so they do not feed that future Washington base, which is one reason residents model conversions now.

Does Washington tax Social Security benefits?

No. Washington does not tax Social Security benefits, because it has no individual income tax (Source: Tax Foundation, 2026). Only the federally taxable portion of Social Security, 0% to 85% depending on combined income, matters at the federal level, and even that federally taxable portion carries no Washington tax today. This stays true for typical retirees after 2028, since Social Security rarely pushes a household above the $1 million deduction.

For how the federal taxation of benefits interacts with a conversion year, see our guide to the taxation of Social Security benefits in 2026. A large conversion can raise the federally taxable share of your benefits and your Medicare premiums, even though Washington itself does not tax the benefits.

Does Washington tax pensions (PERS, TRS, LEOFF, military)?

No. Washington does not tax any pension income in 2026, and it draws no distinction between public, private, and military pensions, because it has no individual income tax (Source: Tax Foundation, taxfoundation.org/location/washington, 2026). PERS, TRS, LEOFF, and federal military retired pay are all untaxed at the state level for a Washington resident.

Federal law 4 U.S.C. 114 separately bars any state from taxing the retirement income of a nonresident, so a pension follows the retiree’s state of legal residence. For a Washington resident that is moot today because Washington imposes no tax to bar. After 2028, a very large pension combined with other income could theoretically reach the $1 million deduction, but standard public pensions fall far below it, so PERS, TRS, and LEOFF retirees are not the target of the new tax.

Washington capital gains tax and retirement accounts

Washington’s only current income-type tax is a capital gains excise tax, and it does not reach a Roth conversion, which is ordinary income rather than a capital gain (Source: WA DOR, “New tiered rates for Washington’s capital gains tax,” dor.wa.gov, 2026). The tax applies only to net long-term capital gains above an indexed standard deduction, at 7%, with a 9.9% top tier on gains above $1 million under SB 5813’s add-on.

Gains realized inside an IRA, 401(k), or Roth account are exempt from this excise tax, and a Roth conversion generates no capital gain, so it is outside the tax entirely. The practical point for a Washington retiree: your conversion is not a capital gain, is not taxed by the capital gains excise tax, and in 2026 is not taxed by any Washington income tax either.

Washington estate tax in 2026 (and no inheritance tax)

Washington has a state estate tax but no inheritance tax, and 2026 is a split year (Source: Washington Department of Revenue, “Estate tax tables,” dor.wa.gov, 2026). For deaths from January 1 to June 30, 2026, the exclusion is $3,076,000 with a top rate of 35%. For deaths on or after July 1, 2026, the exclusion is $3,000,000 with a top rate of 20%.

The estate tax does not touch a Roth conversion during life, but it shapes the case for one: a conversion shifts the income tax burden off your heirs, while the account value remains part of the Washington gross estate. Because Washington’s exclusion is far below the $15,000,000 federal estate and gift exemption for 2026 (Source: IRS, 2026, reflecting OBBBA 2025), estates well under the federal threshold can still owe Washington estate tax. Our overview of the 2026 estate tax exemption covers how state and federal thresholds interact. Washington has no inheritance tax, so heirs are not taxed on receipt.

Illustrative: Washington state tax on a $100,000 Roth conversion

The table below shows illustrative Washington state income tax on a $100,000 Roth conversion for a resident, by year and scenario. It is illustrative only, not a projection or a promise, and it excludes federal income tax, which always applies. It assumes ESSB 6346 takes effect as signed and is not repealed or struck down.

A $100,000 conversion by itself is well under the $1 million deduction, so even after 2028 it is taxed only to the extent it stacks on income that has already used up the deduction. And the only way Washington taxes the conversion at all is through the future income tax, never through the capital gains excise tax (Source: Tax Foundation, 2026; WA DOR, 2026).

Residency, domicile, and timing of a Washington conversion

For income tax purposes in 2026, residency does not affect the conversion at all: since Washington imposes no income tax, it never taxes a Roth conversion regardless of where the resident is domiciled, and there is no conversion-year sourcing issue (Source: WA DOR, 2026). Federal 4 U.S.C. 114, which protects a nonresident’s retirement income, is moot because there is no Washington tax to bar.

Timing matters for a different reason. Conversions in 2026 and 2027 are outside any Washington income tax, while conversions from 2028 onward may fall under ESSB 6346 if the household clears the $1 million deduction and the law is in force. Domicile still governs the estate tax and the capital gains excise tax, but neither reaches a Roth conversion. A resident planning to stay in Washington and expecting large future income is the profile where the pre-2028 window is most relevant.

Will Washington’s new income tax be repealed before 2028?

Maybe. ESSB 6346 faces two live threats before its January 1, 2028 start date, and neither outcome is settled as of mid-2026. A constitutional lawsuit was filed April 9, 2026 in Klickitat County by the Citizen Action Defense Fund, led by former Attorney General Rob McKenna and former Justice Phil Talmadge, arguing the graduated tax violates Washington’s constitutional treatment of income as property (Source: AGC of Washington, “New Income Tax Law Triggers Legal Challenges,” 2026). That case is pending.

Separately, the campaign Let’s Go Washington submitted 511,408 signatures on July 2, 2026 for initiative IP26-645, which would repeal ESSB 6346 before it takes effect and bar income taxes generally (Source: Ballotpedia News, July 7, 2026; Washington State Standard, July 2, 2026). Against a requirement of roughly 308,911 valid signatures, the measure is expected to reach the November 3, 2026 ballot if certified. This live legal and political risk is the honest counterweight to conversion urgency: acting before 2028 avoids a tax that might never take effect, so the decision is about paying a known federal cost now to hedge an uncertain future state cost. Modeling both paths, rather than assuming the tax is certain, is central to how we plan.

How Rothology plans a Roth conversion for Washington residents

Rothology Premier Roth Conversion is a flat-fee, fiduciary planning service from Q3 Advisors that builds a multi-year Roth conversion plan and tax projections accounting for your state of residence. For a Washington resident, that means projecting the $0 state result available through 2027, modeling how the ESSB 6346 9.9% tax and $1 million deduction would treat conversions from 2028 on, and weighing the pending lawsuit and repeal initiative rather than assuming an outcome.

The engagement is educational and factual. Q3 Advisors is a fiduciary, sells no financial products, and charges a flat fee for the planning work. A typical analysis coordinates the federal tax cost of each conversion year, the non-retirement cash needed to pay the federal bill, the pro-rata rule across your IRAs, the fact that recharacterization has been eliminated so a conversion is irreversible, and the effect on future RMDs and Medicare premiums. See our 2026 Medicare IRMAA brackets for that last piece. We start with an educational conversation, not a sales pitch.

Frequently asked questions

Does Washington tax retirement income?

No. Washington has no individual income tax in 2026, so IRA and 401(k) withdrawals, pensions, and Roth conversions are untaxed at the state level, and federal tax still applies (Source: Tax Foundation, 2026). Beginning January 1, 2028, ESSB 6346 adds a 9.9% tax on household income above a $1 million standard deduction, which could reach very large retirement withdrawals but leaves typical retiree income untouched.

Does Washington tax Social Security benefits?

No. Washington does not tax Social Security benefits, because it has no state income tax (Source: Tax Foundation, 2026). Only the federally taxable portion of benefits, 0% to 85% depending on combined income, is taxed, and only at the federal level. This remains true for typical retirees after 2028, since Social Security alone rarely exceeds the $1 million ESSB 6346 deduction.

When does Washington’s 9.9% income tax take effect?

ESSB 6346 is effective for tax years beginning on or after January 1, 2028, with collections beginning in 2029 (Source: EY Tax News 2026-0852; Morgan Lewis, March 2026). Governor Ferguson signed it March 30, 2026. It imposes 9.9% on household income above a $1 million standard deduction. A constitutional lawsuit and a repeal initiative could stop it before that start date.

Should I do a Roth conversion before 2028 in Washington?

That depends on your facts, and this page is educational, not advice. Converting before January 1, 2028 avoids any Washington state tax on the conversion, but the federal cost is due now and the state tax you would be avoiding might be repealed or struck down first (Source: Tax Foundation, 2026; Ballotpedia, 2026). A multi-year projection weighing both paths is the appropriate way to decide.

Does Washington have a capital gains tax on retirement accounts?

Washington’s capital gains excise tax does not apply to retirement accounts or to Roth conversions. It reaches only net long-term capital gains realized outside retirement accounts, at 7% above an indexed deduction and 9.9% above $1 million (Source: WA DOR, dor.wa.gov, 2026). Gains inside an IRA, 401(k), or Roth are exempt, and a conversion is ordinary income, not a capital gain.

Will Washington’s new income tax be repealed before 2028?

It might be. A constitutional lawsuit filed April 9, 2026 in Klickitat County and a repeal initiative, IP26-645, with 511,408 signatures submitted July 2, 2026, both aim to stop ESSB 6346 before its 2028 start (Source: AGC of Washington, 2026; Ballotpedia News, July 7, 2026). If certified, the initiative is expected on the November 3, 2026 ballot. Neither outcome is decided as of mid-2026.

Sources

• Tax Foundation, “2026 Washington Tax Rates & Rankings,” taxfoundation.org/location/washington (no individual income tax in 2026).
• Washington Department of Revenue, “Estate tax” and “Estate tax tables,” dor.wa.gov/taxes-rates/other-taxes/estate-tax and /estate-tax-tables (2026 exclusions and rates); Estate Tax Return Form 84.
• Washington Department of Revenue, “New tiered rates for Washington’s capital gains tax,” dor.wa.gov (7% base rate, 9.9% top tier).
• Morgan Lewis, “Washington Adopts 9.9% Tax on Residents Earning Over $1 Million,” March 2026; K&L Gates, March 2026; EY Tax News 2026-0852, March 2026 (ESSB 6346).
• AGC of Washington, “New Income Tax Law Triggers Legal Challenges,” 2026 (Citizen Action Defense Fund lawsuit, filed April 9, 2026, Klickitat County).
• Ballotpedia News, July 7, 2026, and Washington State Standard, July 2, 2026 (initiative IP26-645, 511,408 signatures).
• Federal: 4 U.S.C. 114 (state taxation of nonresident retirement income); IRS rules on Roth conversions as ordinary income; IRS 2026 estate and gift exemption of $15,000,000 per person (OBBBA 2025).