How does Washington tax remote workers?

Washington does not have a traditional income tax return and remote work is not taxed by the state; however, there are a couple of situations where you may want or need to file a Washington return.

For tax year 2025, Washington has two different types of tax returns for individuals. More information about each tax return is provided below.

1. The Washington Working Families Tax Credit (WFTC) return gives lower income individuals and families a refund on Washington state sales tax they paid during the year. The tax credit has similar eligibility rules as the federal Earned Income Tax Credit (EITC). The credit is for Washington residents; however, Washington has provided the following information for individuals who are in Washington for Work or School:
   
   An individual who is physically present and resides in Washington for at least 183 days and does not commute back to their state of residence will generally be considered to "reside" in Washington and is a Washington resident for WFTC residency purposes.
   
   If you meet the Washington residency requirements and can claim the federal EITC, you can file a Washington Tax Return to claim the Working Families Tax Credit.


2. The Washington Capital Gains Tax return requires individuals with more than $270,000 of long term capital gains sourced to Washington to file a capital gains excise tax return.