2026 capital gains tax rates at a glance
For tax year 2026, long-term capital gains are taxed at 0%, 15% or 20%, depending on your taxable income. A single filer pays 0% while taxable income is at or below $49,450, 15% up to $545,500 and 20% above that; for married couples filing jointly the thresholds are $98,900 and $613,700. Short-term gains, on assets held a year or less, are taxed as ordinary income at 10% to 37%. Above $200,000 of modified AGI ($250,000 joint) a further 3.8% net investment income tax can apply.
The long-term rate ladder has three steps, and each filing status has its own two breakpoints. These are the figures from Rev. Proc. 2025-32 § 4.03, stated as levels of taxable income — that is, after your standard or itemized deduction.
| Filing status | 0% while taxable income is at or below | 15% up to | 20% above |
|---|---|---|---|
| Single | $49,450 | $545,500 | $545,500 |
| Married filing jointly | $98,900 | $613,700 | $613,700 |
| Married filing separately | $49,450 | $306,850 | $306,850 |
| Head of household | $66,200 | $579,600 | $579,600 |
Note how much the joint figures are worth. A married couple can hold nearly $98,900 of taxable income and still pay nothing on a long-term gain. Note too that married filing separately gets exactly half the joint ceilings, which is one of several reasons that election rarely helps.
The standard deduction sits underneath all of this and is worth stating, because it is what separates the gross income you know from the taxable income these ceilings measure: $16,100 single, $32,200 joint, $24,150 head of household.
How capital gains tax works
A capital gain is the profit on a sale, and the tax falls on that profit rather than the sale price. Two things decide what you pay: how long you held the asset, and how much other income you have. Nothing is taxed until you sell. How capital gains tax is calculated walks the computation through in order; how federal capital gains tax works covers the federal layer end to end.
Your gain sits on top of your other income
This is the part most calculators hide, and it is the reason two people with identical gains can owe very different amounts. Long-term gains are stacked on top of your ordinary income. Your salary and other ordinary income fill the lower brackets first; the gain sits above it, and the rate it attracts depends on where that stack lands.
The consequence is that the 0%, 15% and 20% thresholds are measured against your total taxable income, not against the gain alone. A $40,000 gain can be taxed entirely at 0% for someone with little other income, entirely at 15% for someone earning a professional salary, and split across 15% and 20% for someone with a large income. The gain never changed; the stack underneath it did.
A gain can also straddle a boundary, with part taxed at one rate and the remainder at the next. That is not an edge case — it is the normal outcome for any sale large enough to push a taxpayer across a ceiling, and it is why a single "capital gains rate" is a fiction.
The ceilings are marginal, not cliffs: a gain that lands exactly on the 0% ceiling is taxed at nothing, and one dollar more is taxed at 15% on that dollar alone. The long-term rate guide walks that pair through to the cent. The case below is the more common one.
A gain straddling the 15% and 20% bands
A single filer earning $100,000 sells an investment for a $500,000 long-term gain. The gain stacks over the $545,500 fifteen-percent ceiling and splits across two rates.
- Taxable income after deduction
- $583,900
- Taxable gain
- $500,000
- Tax owed without the sale
- $13,170
- Tax the sale added
- $92,120
- of which net investment income tax
- $15,200
- Total federal tax
- $105,290
- Effective rate on the gain
- 18.42%
Part of this gain is taxed at 15% and the rest at 20%, and the split depends entirely on the ordinary income underneath. The 3.8% net investment income tax applies on top of both.
Caveats on this example (1)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income included in your other income are also net investment income under IRC 1411(c) and are not counted here.
Show the working — 13 steps, each with its citation
- Net short-term capital gain or loss for the year$0
Assets held one year or less. Taxed at ordinary rates if a net gain.
- Net long-term capital gain or loss for the year$500,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $600,000 less $16,100.
- Taxable income$583,900
The figure the rate tables and the capital gain ceilings are both measured against.
- Ordinary income taxed at 10%$1,240
$12,400 of taxable income between $0 and $12,400.
- Ordinary income taxed at 12%$4,560
$38,000 of taxable income between $12,400 and $50,400.
- Ordinary income taxed at 22%$7,370
$33,500 of taxable income between $50,400 and $83,900.
- Ordinary income stacked below the long-term gain$83,900
Long-term gain is taxed by reference to where it sits ON TOP of $83,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$69,240
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Long-term gain taxed at 20%$7,680
Gain above the $545,500 maximum 15% rate amount.
- Net investment income tax threshold$200,000
Modified AGI of $600,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax at 3.8%$15,200
3.8% of $400,000, the lesser of net investment income ($500,000) and the amount by which modified AGI exceeds the threshold ($400,000). Here the binding figure is the excess of modified AGI over the threshold.
- Total tax$105,290
$105,290 on $600,000 of total income, an effective rate of 17.55%.
Short-term versus long-term
The holding-period line is the largest lever in the system, and it is binary. A year or less and the gain is short-term, taxed as ordinary income at up to 37%; more than a year and it is long-term at 0/15/20%. The period starts the day after you acquire the asset, so a sale on the first anniversary is still short-term. The calculator above can work the line out from your purchase and sale dates. Short-term capital gains tax and the long-term rate cover each side.
The 3.8% net investment income tax
Above $200,000 single or $250,000 joint, a further 3.8% applies to the lesser of your net investment income and the amount by which your modified AGI exceeds the threshold. That construction is almost always reported wrongly: crossing the line by $100 costs $3.80, not 3.8% of your whole gain. The measure is taken before your deduction, and the thresholds have never been indexed.
How federal capital gains tax works takes the surtax through in full, including the worked case where the whole charge comes to $3.80.
What "effective rate" should mean
This is where our answer diverges from most of the calculators you will find, and the difference is worth stating plainly because it is checkable.
We report the effective rate against the gain: the extra tax the sale caused, divided by the gain itself. That answers the question people actually have, which is "what did selling this cost me?"
The common alternative is to divide total tax by total income. That is not wrong arithmetic, but it answers a different question: it blends in the tax you would have owed on your salary anyway, and then labels the result as the cost of your sale.
How much the two diverge depends on the gain. For a long-term gain the gap is usually under a percentage point, because the gain is taxed at a preferential rate that is not far from the blended average. For a short-term gain the gap is large — the sale is taxed at your top marginal rate while the average is dragged down by all the income taxed in the brackets beneath it. The example below is the second case, and it is the one where a total-income effective rate misleads badly.
The same tax, stated two ways
A single filer earning $200,000 sells shares held under a year for a $150,000 gain. Both effective rates below describe the identical tax bill.
- Taxable income after deduction
- $333,900
- Taxable gain
- $150,000
- Tax owed without the sale
- $36,734
- Tax the sale added
- $54,600.25
- of which net investment income tax
- $5,700
- Total federal tax
- $91,334.25
- Effective rate on the gain
- 36.4%
- The same figure stated against total income
- 26.1%
Over ten percentage points separate the two figures, and only the first one answers "what did selling cost me?". The struck-through number silently includes the income tax on the $200,000 salary, which would have been owed whether or not the shares were ever sold. We show the first number.
Caveats on this example (1)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income included in your other income are also net investment income under IRC 1411(c) and are not counted here.
Show the working — 14 steps, each with its citation
- Net short-term capital gain or loss for the year$150,000
Assets held one year or less. Taxed at ordinary rates if a net gain.
- Net long-term capital gain or loss for the year$0
Assets held more than one year. Eligible for the 0/15/20% rates.
- Short-term gain added to ordinary income$150,000
Short-term capital gain has no preferential rate.
- Standard deduction-$16,100
Adjusted gross income of $350,000 less $16,100.
- Taxable income$333,900
The figure the rate tables and the capital gain ceilings are both measured against.
- Ordinary income taxed at 10%$1,240
$12,400 of taxable income between $0 and $12,400.
- Ordinary income taxed at 12%$4,560
$38,000 of taxable income between $12,400 and $50,400.
- Ordinary income taxed at 22%$12,166
$55,300 of taxable income between $50,400 and $105,700.
- Ordinary income taxed at 24%$23,058
$96,075 of taxable income between $105,700 and $201,775.
- Ordinary income taxed at 32%$17,424
$54,450 of taxable income between $201,775 and $256,225.
- Ordinary income taxed at 35%$27,186.25
$77,675 of taxable income between $256,225 and $333,900.
- Net investment income tax threshold$200,000
Modified AGI of $350,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax at 3.8%$5,700
3.8% of $150,000, the lesser of net investment income ($150,000) and the amount by which modified AGI exceeds the threshold ($150,000). Here the binding figure is net investment income.
- Total tax$91,334.25
$91,334.25 on $350,000 of total income, an effective rate of 26.1%.
Selling your home: the Section 121 exclusion
Sell a home you have lived in and you can exclude up to $250,000 of gain, or $500,000 jointly, provided you owned it and lived in it for two of the five years before the sale. The amounts are statutory and have never been indexed. Two details are routinely got wrong: a partial exclusion prorates the maximum exclusion rather than your gain, and depreciation claimed after 6 May 1997 is never excluded at all.
Avoiding capital gains tax on real estate covers the exclusion, the partial-exclusion arithmetic and what happens when a home has been rented.
Rental property: Section 1250 depreciation recapture
Selling a rental introduces a second rate: gain attributable to depreciation you claimed is unrecaptured Section 1250 gain, taxed at up to 25%. The amount is the lesser of the depreciation and the gain, and 25% is a maximum — on a 22% ordinary rate you pay 22%. It applies to depreciation allowed or allowable, so not claiming it does not avoid the tax. Capital gains tax on real estate works a rental sale through line by line.
Offsetting gains with losses
Losses net by character first — short against short, long against long — and any remainder crosses over. A net loss deducts up to $3,000 against ordinary income ($1,500 filing separately), with the rest carrying forward indefinitely. The wash sale rule disallows a loss if you rebuy within thirty days either side, and this calculator does not detect wash sales. How to avoid capital gains tax covers harvesting alongside the other levers.
State capital gains tax
Federal tax is only part of the bill. Most states tax gains as ordinary income with no preferential rate, so a gain that is federally cheap can still be expensive where you live. We compute 39 of 51 jurisdictions and list the rest as not yet available, so a missing state is never mistaken for a state with no tax. The state comparison table sets every covered state side by side.
- California — Up to 13.3%Taxed as ordinary income, nine brackets, plus a 1% surcharge over $1m.
- Arizona — 2.5% — or 1.875%Flat 2.5%, but 1.875% on gains from assets bought after 2011.
- Texas — No state taxNo individual income tax. Federal tax still applies in full.
- Florida — No state taxNo income tax by constitutional amendment. Federal tax still applies.
- New York — Up to 10.9% + city taxOrdinary income, nine brackets to 10.9%. NYC and Yonkers add their own.
- Washington — 7% / 9.9% exciseNo income tax, but a 7% / 9.9% excise on long-term gains. Real estate exempt.
- Illinois — Flat 4.95%Flat 4.95% on everything. No preferential rate, no exclusion.
- Massachusetts — 5% / 8.5%5% long-term, 8.5% short-term. Collectibles 12% with a 50% deduction.
- Pennsylvania — Flat 3.07%Flat 3.07%, no holding-period distinction, and unusual loss rules.
- Ohio — Flat 2.75%A single 2.75% rate from 2026, above an indexed floor.
- New Jersey — Up to 10.75%Ordinary income to 10.75%. Fixed thresholds, and no loss carryforward.
- Colorado — Flat 4.40%Flat 4.40%. The old capital gain subtraction appears to be gone.
- Michigan — 4.25%Flat 4.25%, but the statute sets a trigger rather than a rate.
- Louisiana — 3%Flat 3%, and the exclusion that used to soften it is gone.
- Idaho — 5.3%A zero band, then 5.3%. The 60% deduction excludes shares.
- Missouri — 0%Gains subtracted in full since 2025. The state tax is $0.
- Mississippi — 0%, then 4%First $10,000 of taxable income at 0%, then 4.0%.
- Georgia — 4.99%Flat 4.99% — not the 5.19% still widely published.
- Kentucky — 3.5%Flat 3.5% for 2026, down from 4% in 2025.
- Indiana — 2.95% + countyFlat 2.95% state, plus a county rate that is not modelled.
- Oklahoma — 0% to 4.5%Zero band, then 2.5/3.5/4.5% — with a revenue trigger on top.
- Iowa — 3.8%Flat 3.8%, with narrow farm and ESOP gain deductions not modelled.
- Utah — 4.5%Flat 4.5%, with a non-refundable taxpayer credit not modelled.
- Delaware — Up to 6.6%Six brackets to 6.6%, on thresholds frozen since 2014.
- Maryland — Up to 8.5%, plus countyTen brackets to 6.5%, a 2% surcharge cliff at $350,000 of AGI, and county tax on top.
- North Carolina — Flat 3.99%Flat 3.99% for 2026, no gains deduction; 2027 depends on a revenue trigger.
- District of Columbia — Up to 10.75%Seven brackets to 10.75%, among the highest rates in the country.
- Kansas — 5.2% / 5.58%Two brackets, 5.2% and 5.58%. No zero band, despite what circulates.
- Minnesota — Up to 9.85%Four brackets to 9.85%, with thresholds indexed annually.
- Virginia — 5.75%Top rate of 5.75% from just $17,000, on 1990 thresholds.
Planning levers that actually work
Five levers do most of the work: cross the one-year line, sell in a low-income year, split a disposal across two tax years, harvest losses, and keep modified AGI below the NIIT threshold. All five work the same way — the gain stacks on your other income, so moving the income moves the rate. How to avoid capital gains tax takes each in turn, and the scenario comparison under your results prices several against your own figures.
Common mistakes
- Treating the rate as a property of the gain. It is stacked on income.
- Applying 3.8% to the whole gain at the NIIT threshold. It applies to the lesser figure.
- Prorating the gain for a partial home-sale exclusion. It prorates the maximum.
- Assuming recapture is always 25%. That is a maximum, not a rate.
- Forgetting the state. 0% federally can still mean thousands at home.
- Reading an effective rate taken against total income. Different question.
Guides to each part of the calculation
Eleven pages, one per question, each with a worked example computed by the same engine as the calculator above. The guide index groups them; the state comparison covers the state layer on top.
- How much is capital gains tax?The dollar answer, at several income levels, and the two facts that decide which rate you land on.
- What is the long-term capital gains tax rate?The 0/15/20 ladder, the 2026 ceilings for every filing status, and how stacking decides which rung you reach.
- What is the capital gains tax rate for 2026?Which 2026 figures moved with inflation, which are frozen in statute, and where the official numbers come from.
- What are the capital gains tax brackets for 2026?Every 2026 threshold for all four filing statuses, and why capital gains have ceilings rather than brackets.
- What is short-term capital gains tax?There is no short-term rate — it is your ordinary rate. What the one-year line costs, and how it is counted.
- How is capital gains tax calculated?The seven steps in the order the code applies them, from adjusted basis through to the 3.8% surtax.
- When do you pay capital gains tax?Owed for the year the sale closes, often due quarterly before then. The dates, and the safe harbour.
- How to avoid capital gains taxSix legal levers that move the rate rather than hide the gain, each with the arithmetic behind it.
- How does federal capital gains tax work?The complete federal layer: the ladder, the two special rate groups, the surtax, and where the state layer begins.
- How much is capital gains tax on real estate?Three property types, three different answers — and why a long-held rental costs more than the headline rates.
- How to avoid capital gains tax on real estateThe home-sale exclusion in detail, including the reduced exclusion most calculators compute incorrectly.
Frequently asked questions
How much is capital gains tax?
For an asset held more than a year, 0%, 15% or 20% federally, decided by your total taxable income rather than by the size of the gain. In 2026 a single filer pays 0% while taxable income stays at or below $49,450, 15% up to $545,500, and 20% above that; filing jointly the two ceilings are $98,900 and $613,700. Held a year or less, the gain is ordinary income taxed at up to 37%. A further 3.8% net investment income tax can apply on top, and most states add their own.
What is the capital gains tax rate?
There is no single rate. Long-term gains use a three-step federal ladder of 0%, 15% and 20%, set by total taxable income. Two special rates sit outside it: collectibles are capped at 28%, and the part of a real-estate gain attributable to depreciation is capped at 25%. Short-term gains use the ordinary rate table, up to 37%. Any of these can carry the additional 3.8% net investment income tax.
When do you pay capital gains tax?
The tax belongs to the year the sale closes, but you rarely pay it in one go the following April. If you expect to owe $1,000 or more after withholding, federal law wants the money in quarterly installments, generally due 15 April, 15 June, 15 September and 15 January. Miss them and an underpayment charge can apply even if you pay in full at filing. The safe harbour is the part worth knowing: pay at least 90% of this year’s tax, or 100% of last year’s — 110% if your prior-year adjusted gross income exceeded $150,000 — and no underpayment penalty applies however large the gain turns out to be.
How much is capital gains tax on real estate?
It depends on what the property was to you. On a main home, often nothing, because the section 121 exclusion covers the whole gain. On a second home, the ordinary 0/15/20% ladder. On a rental the gain splits: the part matching depreciation you claimed is unrecaptured section 1250 gain taxed at up to 25%, and only the remainder gets the preferential rates. Selling a long-held rental therefore produces a higher bill than the headline rates suggest.
How to avoid capital gains tax
The gain itself is rarely avoidable, but its rate very often is, because the rate is set by facts you control. Holding past one year moves the gain onto the 0/15/20% ladder. Realizing in a low-income year can drop it into the 0% band outright. Splitting a disposal across two tax years keeps each half lower in the stack. Harvesting losses offsets gains dollar for dollar. Watching the net investment income tax threshold can save 3.8% on the whole amount. Each of these is a timing or accounting choice the statute expressly contemplates — none of it is evasion, which is concealing a gain you actually realized.
Which states do not tax capital gains?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming levy no individual income tax on capital gains. Washington is the partial exception: it has no income tax, but does impose a separate 7% excise tax on long-term gains above an annually indexed standard deduction. Every other state either taxes gains as ordinary income or applies a specific rate or subtraction.
All nineteen questions, grouped by topic, with the answers written out in full.
Sources
Inflation-adjusted figures for tax year 2026 come from Rev. Proc. 2025-32 (I.R.B. 2025-45). The 2026 adjusted items are in Section 4 of that document — the widely repeated "§ 3.03" citation for the capital gains table is the previous year's numbering and is wrong for 2026.
Statutory figures that are not indexed — the net investment income tax under IRC 1411, the capital loss limitation under IRC 1211(b), the 25% and 28% maximum rates under IRC 1(h), and the Section 121 exclusion amounts — are cited to the Internal Revenue Code. Method for the home-sale exclusion follows IRS Publication 523; depreciation recapture follows Publication 544; netting and carryforward follow Publication 550. State rules are cited to each state's own tax code.
Every figure and its authority is listed on the methodology page, including an explicit list of what this calculator does not model. Every worked example above was generated by the calculator's own engine when this page was built, so the prose here cannot drift away from the tool.