May 19, 2021 Washington State’s New Capital Gains Tax
Washington State’s first capital gains tax has been signed into law and is slated to go into effect at the beginning of 2022. So, what does this mean for Washington State Residents? This means that Washington state residents pay tax at 7% on the sale of stocks, bonds, and other capital assets over $250,000. The $250,000 limit applies to single and married tax filers. There are certain assets that are exempt from the tax, including real estate and timber, and there are some assets that get special deductions.
According to the Seattle Times (1), “the tax would apply to about 7,000 Washingtonians a year and would raise about $445 million starting in the fiscal year 2023, according to estimates by the state Department of Revenue. The money raised will be deposited into the state’s Education Legacy Trust Fund, where it can pay for early learning and childcare programs.”
There is opposition to Washington State’s new Capital gains tax, and court challenges are expected. We will keep you updated if any of the details change. Contact your advisor if you have questions or if you would like to discuss how this tax might apply to you.
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