INTRODUCTION
Washington does not impose income tax. Starting from 1st January 2022, the state started imposing capital gain tax called Capital gains excise tax.
Key Points
- Only individuals owing capital gains tax are required to file a capital gains tax return, along with a copy of their federal tax return for the same taxable year.
- Taxpayers are not required to file a capital gains tax return if your net long-term capital gains are exempt or below the standard deduction of $250,000.
- The capital gains tax return is due at the same time as the individual’s federal income tax return is due.
- Individuals who receive a filing extension for their federal income tax return are entitled to the same filing extension for their capital gains tax return. However, a filing extension does not extend the due date for paying the capital gains tax due.
- All taxpayers must electronically file their capital gains excise tax returns and all required documentation. The tax must be paid by electronic funds transfer or other form of department authorized electronic payment, such as by credit card. The department may waive the electronic filing and payment requirement for good cause. You may incur additional penalties if you do not submit payment electronically.
- Penalties will apply to late returns. Additional penalties and interest will apply to late payments.
- With effect from January, 2022 capital gain excise tax is 7% tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets.
Contact Surya Padhi at Sure Financials for any question and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and New Homepage – National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1.908.300.9193.
