2026 · Washington
Washington severance pay tax
Federal tax takes its 22% cut, but Washington takes nothing. And pays up to $1,208 a week in unemployment. This works out what you owe.
Washington layoff at a glance
| State tax on severance | None, no state income tax |
| State income tax | None |
| Unemployment weekly max | $1,208 for up to 26 weeks |
| Unemployment taxed by Washington? | No |
How Washington withholds on severance
Washington has no state income tax, so none of your severance is withheld for the state, a real edge over high-tax states. On top of that, the federal government withholds a flat 22% (37% over $1 million) and FICA, 6.2% Social Security up to the $184,500 wage base plus 1.45% Medicare.
Washington has no state income tax at all, so neither your severance nor your unemployment faces a state levy, a group of just nine states. If you also claim unemployment, Washington pays up to $1,208 a week for up to 26 weeks, and does not tax it. That's the Washington layoff picture in one place, the severance tax here, the unemployment on its own Washington page.
Worked example: $40,000 severance in Washington
A single filer, $40,000 severance paid separately, with $60,000 of other 2026 income:
| Federal withholding (22%) | −$8,800 |
| FICA (Social Security + Medicare) | −$3,060 |
| Washington withholding | $0 |
| Net check | $28,140 |
| What it costs in tax | $11,210 |
Over-withheld by about $650, expect roughly that back as a refund at filing. The withholding is a fixed rate; your actual tax is your marginal rate on the severance stacked on your other income.
Stacking Washington unemployment on top
Washington sizes your weekly check off your recent wages, up to $1,208 a week, one of the more generous in the country (1th of 51). There is no separate dependent add-on. Duration max $1,208 for claims on/after 2026-07-05.
| Weekly benefit range | $383 - $1,208 |
| How the amount is set | Off your recent wages |
| Maximum duration | 26 weeks (max $1,208 for claims on/after 2026-07-05) |
| Waiting week | Yes, one unpaid week |
| Dependent allowance | None |
| Taxed by Washington | No |
Stacked together, that $40,000 severance nets about $28,140 and Washington's unemployment can add up to $31,408 over 26 weeks, about 15 months of a $4,000 budget before you need a paycheck. File through Washington Employment Security Department (ESD); nail down the exact figure in the runway calculator.
If your next move is freelancing in Washington
A layoff is how a lot of 1099 careers start, and "Washington has no income tax" is only most of the story for the self-employed. Washington is the big exception among no-income-tax states: its business and occupation (B&O) tax is a gross receipts tax, on revenue, not profit, with no deduction for expenses, from the first dollar. For services the rate is 1.5% when prior-year receipts are under $1,000,000 (1.75% from $1,000,000, 2.1% from $5,000,000); retailing is 0.471%. Two reliefs matter for small operators: you only need to register with the Department of Revenue once gross income reaches $12,000 a year, and the small business credit wipes out B&O liability below $3,840 a year for service businesses filing annually.
The Washington 1099 calculator runs the federal side, which applies in full no matter what the state skips.
Questions about Washington severance tax
Is severance taxed higher in Washington?
No. It's withheld at a flat 22% federally and Washington takes no state tax at all, but it's taxed as ordinary income at your normal rates. The worked example on this page shows the gap in dollars: on a $40,000 severance, $8,800 of federal tax is withheld up front while the severance actually costs about $11,210 in tax for that filer. Whichever direction the gap runs, it settles up at filing, a refund if too much was taken, a bill to plan for if too little.
Does Washington tax my severance?
No, Washington has no state income tax, so your severance keeps its full value at the state level (federal tax and FICA still apply).
Will I get a refund or owe more?
It depends on your bracket. The flat 22% over-withholds for lower earners (refund) and under-withholds for those in the 32 to 37% brackets (set aside the difference). The crossover sits where your marginal rate passes 22%: below it, every severance dollar was over-withheld and comes back; above it, the flat rate quietly under-collects and the difference lands on your return as a balance due. For the $40,000 example on this page with $60,000 of other income, the calculator's verdict is printed under the worked example. Enter your numbers above to see which way it goes for you.
Your Washington layoff toolkit
- Washington unemployment benefits weekly amount and duration
- Runway calculator how long your money lasts
- Washington paycheck calculator take-home at your next job
- Washington 1099 tax if you go freelance
An estimate for the 2026 tax year. State supplemental figures from the verified dataset, last verified 2026-07-24. Nothing you enter is stored. Not tax advice.