Estimates only — this is not tax advice. Consult a CPA or enrolled agent before acting on these figures. The calculator does not model the alternative minimum tax, wash sales, like-kind exchanges, QSBS, installment sales, or state additions and subtractions. See what is out of scope.
Show your work — 0 steps, each with its rule and citation
How California taxes a capital gain
Statutory authority: Cal. Rev. & Tax. Code 17041 (rate ladder), 17043 (Behavioral Health Services Tax)
California gives capital gains no preferential rate at all
This is the single most expensive thing to misunderstand about California. There is no state equivalent of the federal 0/15/20% ladder. A long-term gain and a paycheque of the same size are taxed identically, at whatever ordinary rate your total income reaches. Someone who pays 0% federally on a modest long-term gain can still owe California several thousand dollars on it.
The ladder runs across nine brackets — 1%, 2%, 4%, 6%, 8%, 9.3%, 10.3%, 11.3% and 12.3%. Because a gain stacks on top of your other income, a large sale typically lands most of the gain in the 9.3% band or above, well clear of the low opening rates that make the schedule look gentler than it is.
The 1% surcharge above $1,000,000 is not doubled for married couples
On top of the ordinary ladder sits a 1% Behavioral Health Services Tax — formerly the Mental Health Services Tax — on taxable income above $1,000,000. Combined with the 12.3% top bracket, this produces the 13.3% figure California is known for.
The detail that catches people out is in the statute itself. RTC 17043 states that the provisions relating to joint returns do not apply to this tax. Joint filers do NOT get a doubled threshold: a married couple with $1,200,000 of taxable income pays the surcharge on $200,000, exactly as a single filer would. Nor is the $1,000,000 figure indexed — it has been a flat statutory amount since it was introduced, so inflation pulls more households across it every year.
Which schedule applies to you
California puts single filers and married-filing-separately filers on one schedule (RTC 17041(a)(1)) and gives heads of household their own (17041(c)(1)). The joint schedule is exactly double the single schedule at every transition — a relationship worth stating precisely, because at least one widely-syndicated rate table gets the joint top bracket wrong by publishing the head-of-household figure in its place.
Bracket thresholds are recomputed each year by the Franchise Tax Board against the California CPI under RTC 17041(h). The 2026 schedule is published in the autumn of 2026; until it appears, this calculator uses the 2025 thresholds and says so in a warning on every California result. The rates themselves are statutory and do not move.
What California does not change
Your federal position is unaffected by living in California. The 0/15/20% long-term rates, the 3.8% net investment income tax, the Section 121 home-sale exclusion and Section 1250 depreciation recapture all apply exactly as they would anywhere else. California tax sits on top of that, not instead of it.
One thing this calculator does not model: California computes its own taxable income, with its own additions and subtractions, and does not conform to every federal provision. The state figure here stacks your gain on your federal ordinary taxable income, which is an approximation — a good one for straightforward wage-and-sale situations, and a rough one if your return carries significant state adjustments.
A worked California example
Every figure below is computed by the same engine that powers the calculator above, at the moment this page was built — not typed in by hand. When the tax-year data is updated, this example updates with it.
Selling $250,000 of vested RSUs on a $220,000 salary
A single filer in California with $236,100 of gross salary sells long-held shares for a $250,000 gain. This is the common tech-employee case: a high ordinary income with a large equity sale on top.
- Taxable income after deduction
- $470,000
- Taxable gain
- $250,000
- Tax owed without the sale
- $46,856
- Tax the sale added
- $47,000
- of which net investment income tax
- $9,500
- Total federal tax
- $93,856
- California state tax
- $24,477.50
- Effective rate on the gain
- 18.8%
The federal rate on this gain is 15%, but California adds another 9.3% with no preferential treatment whatsoever, and the net investment income tax adds 3.8% on top. The combined bill is roughly double the headline federal rate.
Caveats on this example (3)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income inside ordinaryIncome are also net investment income under IRC 1411(c) and are not counted here.
- California bracket thresholds are the 2025 figures; the 2026 amounts were not published when checked, so the California figure will change once they are. The rate ladder itself is verified from Cal. Rev. & Tax. Code 17041 (ladder), 17043 (BHST surcharge).
- California: the state taxable income base is approximated by federal ordinary taxable income. State additions, subtractions and deductions are not modelled.
Show the working — 15 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$250,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $486,100 less $16,100.
- Taxable income$470,000
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%$5,832
$18,225 of taxable income between $201,775 and $220,000.
- Ordinary income stacked below the long-term gain$220,000
Long-term gain is taxed by reference to where it sits ON TOP of $220,000 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$37,500
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Net investment income tax threshold$200,000
Modified AGI of $486,100 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%$9,500
3.8% of $250,000, the lesser of net investment income ($250,000) and the amount by which modified AGI exceeds the threshold ($286,100). Here the binding figure is net investment income.
- California income tax on the gain$24,477.50
$250,000 stacked on $220,000 of other taxable income across a 9-bracket ladder topping out at 13.3%. Federal ordinary taxable income is used as the base; the state's own taxable income differs, so treat this as an approximation.
- Total tax$118,333.50
$118,333.50 on $486,100 of total income, an effective rate of 24.34%.
What this calculator does not cover for California
The California figure stacks your gain on your federal ordinary taxable income. California computes its own taxable income with its own additions and subtractions, which are not modelled here — so treat the state number as a close approximation for a straightforward wage-and-sale situation, and as a rough one if your return carries significant state adjustments.
Full-year residency is assumed throughout. Part-year residents, non-residents, and gains sourced to property in another state all turn on rules this calculator does not model. The complete list of what is in and out of scope is on the methodology page.
Other states
- WashingtonNo income tax, but a 7% / 9.9% excise on long-term gains. Real estate exempt.
- TexasNo individual income tax. Federal tax still applies in full.
- New YorkOrdinary income, nine brackets to 10.9%. NYC and Yonkers add their own.
See the full 2026 capital gains guide for the federal rules that apply wherever you live — the rate ladder, the net investment income tax, the home-sale exclusion and depreciation recapture — plus every state we currently cover.