Seattle Remote Work Tax Guide: Working for Out-of-State Companies from Washington
Washington\'s zero income tax makes Seattle attractive for remote workers, but the B&O tax and capital gains tax add complexity. Here is your complete guide.
Seattle offers remote workers the best of both worlds: zero state income tax and access to the Pacific Northwest\'s tech ecosystem. Amazon, Microsoft, and hundreds of startups provide remote-friendly employment, and Washington\'s lack of income tax means your entire salary is free from state taxation. But there are nuances every remote worker should understand.
Zero Income Tax for Remote Employees
If you are a W-2 employee working remotely from Seattle, Washington does not tax your wages regardless of where your employer is located. A remote worker earning $180,000 for a California company saves approximately $14,000 per year in state income tax by living in Seattle instead of San Francisco.
Oregon Border Tax Trap
If your employer is in Portland, Oregon, be careful. Oregon taxes non-residents on income earned within the state. If you occasionally travel to your employer\'s Oregon office, those days may be taxable in Oregon. Washington does not provide a credit for taxes paid to other states (since it has no income tax), so this becomes a pure additional cost.
B&O Tax for Remote Contractors
If you are an independent contractor (not a W-2 employee), Washington\'s Business and Occupation tax applies to your gross revenue. The service rate is 1.5%, though the Small Business Credit exempts the first $125,000. Seattle adds its own B&O tax for revenue exceeding $100,000. Remote contractors must register and file with both the state and city.
Capital Gains Tax on Stock Compensation
Washington\'s 7% capital gains tax on gains exceeding $250,000 affects remote workers with significant stock compensation. If you sell vested RSUs or exercise stock options with gains above the threshold, plan the timing carefully. Spreading sales across tax years can keep you below the exemption amount.
Multi-State Filing Requirements
If you travel to your employer\'s office in another state, you may owe taxes in those states for the days worked on-site. Georgia provides a credit for taxes paid to other states, preventing double taxation. Keep a detailed log of your work location each day and file non-resident returns in any state where you exceed the filing threshold.
Pro Tip: Use our Seattle Salary Calculator to compare your remote work take-home pay in Washington versus other states and see the full benefit of zero income tax.
Pacific Northwest Tax Analyst
Emily covers Washington State tax policy, capital gains taxation, and B&O tax compliance for Seattle-area professionals. She previously worked at the Washington Department of Revenue.
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