RSUs vest tax-free in Washington. Selling them is another matter.

The mechanics

Vesting is wage income, which Washington does not tax. Appreciation after vest is capital gain, and large sales now carry 7% to 9.9% state tax. Employees who held everything through the last decade of appreciation are holding exactly the kind of concentrated position the new tax reaches.

The playbook, built with your CPA

1. Sell at vest going forward. No appreciation means no capital gain and no state tax. Standard advice before 2025; stronger now.
2. Harvest the legacy position in tranches. Spreading sales across tax years, and keeping annual realized gains below the $1M surcharge line where practical, reduces the total rate paid.
3. Rotate proceeds into exempt assets. This is the real estate step: Eastside income property, a short-term rental with cost segregation offsetting W2 income, or a home purchase you were planning anyway.
4. Watch the estate line. The position you keep counts toward a $3M exclusion at rates up to 35%.

A worked example

A Redmond couple holds $4M in vested RSUs with $2.8M of embedded gain. Sold in one year, the state tax is roughly $230K. Sold across four years in tranches below the surcharge threshold, with proceeds moving into two rental properties, the state tax falls by roughly half, future appreciation accrues in an exempt asset class, and depreciation offsets current W2 income. These figures are illustrative; your CPA runs your version.

This is not tax or legal advice. Aditya Kasturi is a licensed real estate broker, not a CPA, attorney, or financial advisor. Figures are illustrative, based on Washington and federal law as understood at the time of writing, and laws change. Confirm any strategy on this page with your CPA and, where relevant, your estate planning attorney before acting.