Does Washington tax military retirement?

No. Washington has no income tax on military retired pay, pensions or Social Security.

Does Washington have a state income tax?

Not today. A 9.9% tax on income over $1 million is scheduled for 2028, and a repeal initiative is on the November 3, 2026 ballot.

Do disabled veterans get a property tax break in Washington?

Yes, through the senior and disabled exemption program: 80%+ rated (or paid at 100%) for 2026 taxes, 40%+ from 2027, with county income limits that don't count VA disability pay.

How high is sales tax near JBLM?

About 9.6% to 10.5% (Tacoma 10.5%, Lakewood 10.3%, DuPont 9.7%).

Washington retirement taxes in 2026: no income tax, high sales tax, and the property tax exemption

Short answer

Washington has no state income tax today, so Social Security, pensions, IRAs, 401(k)s and military retired pay are not taxed. What retirees do pay: sales tax of about 9.6% to 10.5% around JBLM, and property tax of about 0.75% of home value. Homeowners 61+, people retired because of disability, and qualifying disabled veterans with incomes under their county's limit can get a property tax exemption.

Not tax advice. Rules change; confirm with the Washington Department of Revenue, your county assessor or a tax professional.

Washington at a glance (2026)

	Washington
State income tax	None today (a 9.9% tax on income over $1M is scheduled for 2028; see below)
Social Security, pensions, IRA, 401(k)	Not taxed
Military retired pay and SBP	Not taxed
Capital gains tax	7% on long-term gains over the standard deduction, 9.9% above $1M; retirement accounts and real estate exempt
Sales tax near JBLM	Tacoma 10.5%, Lakewood 10.3%, DuPont 9.7% (Oct–Dec 2026)
Senior and disabled property tax exemption	Age 61+, disability retirement or qualifying veteran; county income limits
Disabled veteran eligibility (2026)	80%+ service-connected or paid at the 100% rate; 40%+ from 2027
Estate tax	Exclusion $3,000,000; rates 10%–20% for deaths from July 1, 2026
Average property tax	About 0.75% of home value a year

Income tax

Washington doesn't tax wages or retirement income. A 9.9% tax on adjusted gross income over $1 million was enacted in 2026, starting in 2028. Initiative I-645, on the November 3, 2026 ballot, would repeal it. It wouldn't affect most retirees either way. Sources: Washington DOR, Income Tax and Income Tax FAQ; ESSB 6346 (2026).

Capital gains tax

A 7% tax on long-term capital gains above the standard deduction ($278,000 for 2025), plus an extra 2.9% on gains over $1 million. It doesn't apply to sales of real estate or to activity inside retirement accounts (401(k), IRA, Roth). Source: Washington DOR, Capital Gains Tax and FAQ; June 30, 2025 special notice.

Property tax exemption for seniors, disabled people and veterans

Who: homeowners 61 or older by December 31 of the year before taxes are due, people retired because of disability, or qualifying disabled veterans, who live in the home and whose combined disposable income is at or under their county's limit. Pensions, Social Security and military retired pay count as income. VA disability compensation and DIC don't. CRSC stops counting starting with 2027 taxes; if you're already in the program, file a status change with your assessor to have it removed.

What you get: a frozen home value, exemption from voter-approved excess levies, and, at lower incomes, a partial exemption from regular levies.

Pierce County (near JBLM) income limits:

Tier	Taxes in 2026	Taxes in 2027–2029
Threshold 1	$46,000	$64,000
Threshold 2	$55,000	$74,000
Threshold 3 (top limit)	$64,000	$85,000

Apply with your county assessor and renew at least every six years. Deferral programs are also available, with 5% simple interest, repaid when the home is sold. Sources: Washington DOR, Property Tax Exemption for Seniors, People Retired Due to Disability, and Veterans with Disabilities; DOR income thresholds for 2024–2026 and 2027–2029; Pierce County Assessor-Treasurer; DOR notice on ESSB 6162 (June 2026); EHB 1106 (2025).

Disabled veterans

Through the same program: for 2026 taxes, a VA combined rating of 80% or more, or paid at the 100% rate (Individual Unemployability). For 2027 taxes and later, this drops to 40% or more. The county income limit still applies, but VA disability compensation doesn't count as income. Sources: Washington DOR; RCW 84.36.381; EHB 1106 (2025).

Sales tax and estate tax

Sales tax: 6.5% state plus local. Around JBLM: Tacoma 10.5%, Lakewood 10.3%, Puyallup 10.3%, DuPont 9.7%, unincorporated Pierce County 9.6% (October–December 2026).
Estate tax: a $3,000,000 exclusion (not indexed). Rates are 10% to 20% for deaths from July 1, 2026. That's far below the federal exemption, so it matters for retirees with a paid-off home and savings.

Sources: Washington DOR, Q4 2026 sales tax rates; Estate Tax Tables.

Common mistakes

Assuming the property tax exemption is automatic. Apply, renew, and report changes.
Thinking pensions and Social Security don't count toward the income limit. They do; VA disability pay doesn't.
Using the old 80% veteran rule for 2027. It's 40%+ from 2027.
Overlooking sales tax of 10%+ in much of Pierce County.
Assuming the estate tax only hits the very wealthy. The $3,000,000 exclusion is low.

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FAQ

Does Washington tax military retirement?: No. Washington has no income tax on military retired pay, pensions or Social Security.
Does Washington have a state income tax?: Not today. A 9.9% tax on income over $1 million is scheduled for 2028, and a repeal initiative is on the November 3, 2026 ballot.
Do disabled veterans get a property tax break in Washington?: Yes, through the senior and disabled exemption program: 80%+ rated (or paid at 100%) for 2026 taxes, 40%+ from 2027, with county income limits that don't count VA disability pay.
How high is sales tax near JBLM?: About 9.6% to 10.5% (Tacoma 10.5%, Lakewood 10.3%, DuPont 9.7%).

Sources

Last reviewed October 21, 2026. Not tax advice.