In the 2026 legislative session, Washington lawmakers passed a historic “Millionaires Tax”: a tax on yearly income above $1 million. Starting in 2029, this tax will bring in over $3 billion per year, helping to make progress on righting Washington’s upside-down tax code and funding essential programs and services like affordable childcare and healthcare access.
The Millionaires Tax also funds a dramatic expansion to the Working Families Tax Credit. The expansion more than doubles the number of households who can benefit from the Working Families Tax Credit, by raising the income limit so that more people with low and moderate incomes can qualify. The expansion also removes an age restriction so young adults living on lower incomes, and seniors still working to cover their costs, can benefit from the tax credit.
The expansion will mean that:
- Almost half a million more households will be able to qualify for a cash boost of up to $1,330. A total of about 800,000 households will be eligible for the Working Families Tax Credit.
- Low-income, self-supporting young adults will be able to qualify
- Low-income, working seniors will be able to qualify
- Almost half (47%) of kids in WA will benefit
About the Millionaires Tax
The Millionaires Tax will not just mean more cash back to working people through the Working Families Tax Credit. It also will also provide:
- Free school meals for all K-12 students.
- A Business & Occupation (B&O) small business tax credit that more than doubles the current credit, so that businesses with revenue under $250,000 no longer need to file or pay B&O taxes.
- A sales tax exemption on hygiene items like soap and shampoo, diapers, and over the counter medication.
- Increased funding for affordable childcare and early childhood education.
The tax is structured so that only income above $1 million dollars is taxed at a rate of 9.9%. For example, someone making $1 million per year would pay $0; someone making $1,000,500 per year will pay $50. Approximately 20,000 households in Washington make enough to pay this tax, and the majority of those households live in King County.