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Washington Millionaires Tax 2026 has officially become law today, April 28, 2026, as Governor Bob Ferguson signed S.B. 6346 and S.B. 6347. This legislative “one-two punch” fundamentally alters Washington’s status as a no-income-tax haven, while simultaneously extending an olive branch to high-net-worth estates by rolling back last year’s aggressive rate hikes.
While supporters hail this as a historic move toward tax fairness, tax practitioners are already bracing for a “constitutional cage match” in the Washington Supreme Court, where the definition of “income as property” remains a contentious legal hurdle.
The New 9.9% Millionaires Tax: What You Need to Know
S.B. 6346 introduces a graduated tax structure targeting the state’s highest earners. While the first filings aren’t due until 2029, the legislative clock starts now for residency planning and income-timing strategies.
- The Rate: A flat 9.9% levy on taxable income.
- The Threshold: Only applies to Washington taxable income exceeding $1,000,000 per household (indexed for inflation starting in 2029).
- The Scope: Residents, part-year residents, and nonresidents with Washington-source income (including K-1 distributions from pass-through entities).
- Estimated Impact: Projected to affect fewer than 0.5% of Washingtonians while raising over $3 billion annually for K-12 education and childcare.
Estate Tax Reversal: Rolling Back the 35% Rate
In a surprise move to balance the new income levy, S.B. 6347 reverses the controversial estate tax increases of 2025. Effective July 1, 2026, the top estate tax rate will plummet from 35% back to the pre-2025 level of 20%.
| Washington Taxable Estate Value | Rate Through June 30, 2026 | New Rate (Effective July 1, 2026) |
| $0 to $1M | 10% | 10% |
| $4M to $6M | 23% | 18% |
| $7M to $9M | 30% | 19.5% |
| $9M+ | 35% | 20% |
Candid Peer Insight: While the 20% top rate is a relief, the “catch” is that the exemption has been effectively frozen at $3,000,000. Because the new law reverts to an inflation index that technically no longer exists, the $3M floor is likely to remain static for the foreseeable future, potentially pulling more “moderately wealthy” estates into the tax net over time.
