Washington’s measure is enacted, not merely proposed. The Department of Revenue says the new 9.9% tax begins January 1, 2028, and the first returns are due in April 2029. It applies to individuals and married couples filing jointly whose annual adjusted gross income exceeds $1 million, but your exposure depends on two separate facts: whether you are a Washington resident for the tax year and where you physically performed work if you are not a resident.
An employer’s headquarters, payroll office, or remote-work agreement does not by itself determine the Washington share of wages. Under the enacted sourcing rule, a nonresident’s employee compensation follows the place where services were performed. Someone who works some days in Washington and some elsewhere will generally need a workday-based allocation, subject to any different reasonable method approved by the Department of Revenue.
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What Washington enacted and when it starts
The Washington Department of Revenue’s current FAQ describes a 9.9% tax on individuals and married couples filing jointly with annual adjusted gross income above $1 million. The effective date is January 1, 2028. The agency says the first returns will be due in April 2029.
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The two questions that determine a remote worker’s treatment
Washington’s law uses different allocation frameworks for residents and nonresidents. Decide residency first. Only then apply the source rules to income earned during any nonresident period.
| Status | General statutory allocation | Remote-work implication |
|---|---|---|
| Washington resident | The statute generally allocates all income to Washington. | The place of an employer’s office does not narrow the resident rule; the resident framework applies to total income, subject to the law’s definitions and later guidance. |
| Nonresident | Only Washington-source income is allocated to Washington. | Employee compensation is sourced where the employee actually renders services. Washington workdays matter even when the employer is based elsewhere. |
| Part-year resident | Washington adjusted gross income combines income while resident with Washington-source income earned while nonresident. | The move date, work locations before and after the move, and any pass-through interests can all affect the calculation. |
When Washington treats someone as a resident
Domicile-based residency
The enacted definition treats a person domiciled in Washington during the taxable year as a resident, subject to a narrow exception. Domicile is the person’s permanent home and the place they intend to return to; changing a mailing address or signing a lease elsewhere is not automatically a complete legal answer.
The nondomiciliary day-and-abode test
A person who is not domiciled in Washington can still be a resident if both conditions are met: the person maintains an abode in Washington and is physically present there for more than 183 days during the taxable year. The abode requirement matters. Spending more than 183 days without maintaining an abode does not match the statutory test, and maintaining an abode without exceeding the day threshold does not satisfy this particular route to residency.
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The statute provides an exception only when every listed condition is met for the entire taxable year. The person must have no permanent place of abode in Washington, maintain a permanent place of abode outside Washington, and be present in Washington for no more than 30 days. Missing any one of those conditions prevents reliance on this exception.
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Because residency turns on statutory definitions and facts, keep evidence of homes, leases, household ties, travel, and the dates you were physically in Washington. A simple day count cannot replace the abode and domicile analysis.
How the nonresident wage rule works for remote and hybrid jobs
The codified rule subjects a nonresident to tax on compensation derived from employment within Washington, regardless of the employer’s commercial domicile. “Compensation” includes wages, salaries, commissions, and other remuneration for employee personal services.
Physical work location controls
For a nonresident, the relevant question is where the service was rendered. An employee who performs work from a home in another state is performing those services outside Washington, even if the company’s headquarters, payroll department, or manager is in Seattle. Conversely, physically working in Washington can create Washington-source compensation even when the employer is headquartered in another state.
Mixed Washington and out-of-state work
When a nonresident works in Washington and elsewhere during the year, the enacted statute uses the ratio of Washington workdays to total workdays unless the Department of Revenue approves another reasonable method. The rule focuses on duty days, not merely the number of paychecks issued from a Washington payroll system.
Illustration, not a tax calculation: an Idaho resident works 240 total days for one employer, spending 60 days physically in Washington and 180 days at an Idaho home office. The statutory starting point is the 60-to-240 Washington workday ratio for that compensation. The example does not establish a filing threshold, deductible amount, or final liability.
Employer location is not a shield
A remote-work agreement that says an employee is assigned to an out-of-state office does not substitute for evidence of where the work occurred. Likewise, a Washington employer does not automatically make every day of an employee’s out-of-state work Washington-source income under this nonresident wage rule. Keep the actual locations and dates that support the allocation.
What happens when you move during the year
A midyear move creates two periods. The House legislative analysis describes Washington adjusted gross income for a part-year resident as all income earned while the person was a Washington resident, plus Washington-source income earned while the person was a nonresident. It also notes special rules for pass-through entities, so owners of partnerships, S corporations, and similar entities should not assume that an employee wage example answers their situation.
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Moving out of Washington
If you establish a new domicile outside Washington and become a nonresident, the resident period remains subject to the resident allocation framework. After the move, only Washington-source income is included under the nonresident framework. Continuing to work physically in Washington after the move can therefore matter even when your home and domicile are elsewhere.
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Moving into Washington
If Washington becomes your domicile during the year, income earned during the Washington-resident period is combined with Washington-source income from the earlier nonresident period. The precise move date, the location of services before and after the move, and the nature of investment or business income should be documented.
| Illustrative fact pattern | Issue to analyze |
|---|---|
| Washington resident works entirely from Washington for an out-of-state company | Residency allocation applies first; the employer’s state does not convert the person into a nonresident. |
| Oregon resident works entirely from Oregon for a Washington company | For employee wages, the nonresident sourcing rule looks to Oregon service days, not the company’s Washington address. |
| Oregon resident works two days a week in Washington and three days at home | Track Washington and total workdays for the statutory allocation, subject to any later DOR-approved method. |
| Person moves from Washington to California in July | Separate resident-period income from post-move Washington-source income; pass-through interests may require additional rules. |
How to prepare your records
The law makes workday and residency facts important, even though the Department has not finished publishing every filing procedure. Start a contemporaneous record rather than reconstructing locations two years later.
- Track each workday’s physical location. Record the state where you performed services, including travel days and days at a temporary worksite. Retain calendars, time sheets, badge records, travel receipts, or employer scheduling data that corroborate the entry.
- Separate service days from leave. Vacation, sick leave, holidays, and other nonworking days may affect the denominator under a duty-day method. Do not silently count every calendar day as a workday.
- Keep employment and payroll documents. Save Forms W-2, pay statements, commission reports, employment agreements, remote-work approvals, and year-end employer summaries. These documents identify compensation but may not prove where each service day occurred.
- Document domicile and abodes. Retain lease or purchase records, utility accounts, driver-license and voter-registration changes, household moves, and travel logs. These facts support the domicile and abode analysis if the Department asks questions.
- Preserve move-date evidence. For a midyear move, keep the date you surrendered or established homes, moved household property, changed employment location, and began living at the new permanent home.
- Monitor official updates. Before the first filing season, check the Department of Revenue’s instructions for filing eligibility, adjusted-gross-income calculations, allocation worksheets, and record-retention expectations.
A paper organizer, spreadsheet, or workday-location log can help maintain this evidence. Such a tool is for recordkeeping; it does not determine whether you owe tax or replace professional advice.
Interaction with another state’s tax system
Working across state lines can expose the same income to more than one jurisdiction’s rules, but Washington sources do not establish how another state will treat the income. Do not assume that you will always owe both states, or that one state’s return automatically resolves the other state’s claim.
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The House legislative analysis says a Washington resident may claim a credit for tax paid to another state or its political subdivision on income also subject to Washington tax. Eligibility, limits, and the amount of any credit depend on the applicable law and computation. A credit should not be treated as a guaranteed elimination of double taxation.
Why Washington can impose this tax despite its older income-tax prohibition
The enacted law amends Washington’s general personal-income-tax prohibition to exempt the tax authorized in chapter 82A.04 RCW, provided the standard deduction is at least $1 million for a household. This statutory condition explains how the new measure coexists with the state’s earlier prohibition language. It is not a substitute for the Department’s eventual rules on adjusted gross income, filing, or calculation.
What is still being developed
The statute is enacted, but administrative details are not complete. The Department of Revenue has said further guidance on who must file and how income is calculated will be provided as available.
The House legislative analysis also says the Department must submit proposed legislation for a duty-day approach by January 1, 2028. That deadline requires a proposal; it is not itself a completed rule and does not change the statute until legislation is enacted.
| Milestone | What it means |
|---|---|
| January 1, 2028 | Effective date identified by the Department of Revenue for the new tax. |
| January 1, 2028 | Legislative deadline for the Department to submit proposed duty-day apportionment legislation; proposal is not final law. |
| April 2029 | Timing identified by the Department for first returns. |
| Before filing | Additional Department guidance is expected on filing obligations, income calculations, and other administrative requirements. |
A practical decision path for remote workers
- Identify your status for each part of the year. Determine whether you were domiciled in Washington, met the nondomiciliary abode-and-days test, qualified for the narrow exception, or changed status during the year.
- Divide the year at any residency change. Mark the move or status-change date and keep separate income and work-location records for each period.
- For nonresident periods, map service locations. Count Washington workdays and total workdays using a consistent method supported by records.
- Classify income. Wages and commissions follow the employment sourcing rule; pass-through, business, property, and investment income may have different statutory provisions.
- Apply the threshold and filing instructions once published. The $1 million adjusted-gross-income threshold is the Department’s current headline standard for individuals and joint filers, but the final return mechanics and income definition require the agency’s guidance.
- Review other-state consequences. Compare the Washington result with the laws of every state where you lived, worked, or earned related income, and evaluate any credit under the applicable statutes.
Bottom line for interstate remote work
The enacted Washington tax is not a simple employer-location tax. A high-income Washington resident faces the resident allocation framework, while a high-income nonresident generally looks to Washington-source income. For employee compensation, the decisive evidence is where services were physically performed. A midyear move requires a split-period analysis, and the Department’s forthcoming guidance may refine filing and duty-day procedures before the first returns are filed.
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