What if?
The same sale under different choices, each computed by the engine rather than estimated. Figures are the tax on the gain, so the rows stay comparable when a variant spans two tax years. Select one to load it into the calculator and read its full derivation.
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 North Carolina taxes a capital gain
Statutory authority: NCDOR, "Tax Rate Schedules" (Session Law 2023-134); 2025 Form D-401 instructions (retrieved 2 September 2026)
The rate has fallen every year but one since 2019, and 2026 is 3.99%
The Department of Revenue’s own schedule is short enough to quote: "For Taxable Years after 2025, the North Carolina individual income tax rate is 3.99% (0.0399)." The same page lists the path here — 5.25% for 2019 through 2021, 4.99% in 2022, 4.75% in 2023, 4.5% in 2024, 4.25% in 2025 — a phase-down enacted in Session Law 2023-134 and carried out on schedule so far.
A capital gain is taxed at that single rate, whatever its size and however long the asset was held. There is no bracket to climb, so the arithmetic on the state side is one multiplication, and the interesting questions are all on the federal side.
No capital gains schedule, and no deduction for gains
This was checked against the return instructions, not inferred from the rate. The 2025 Form D-401 booklet does not contain the phrase "capital gain" anywhere in its sixty-odd pages. There is no state capital gains form, and the list of deductions from federal adjusted gross income on Schedule S, Part B, has no general deduction for gains. The only gain-related items are narrow: a recognised Opportunity Fund gain that had already been added back in an earlier year, and gain on North Carolina obligations issued before July 1995.
The absence matters because several neighbouring systems do have one. Arkansas taxes half of a long-term gain; Arizona subtracts a quarter of qualifying gain; Montana runs a separate ladder for it. North Carolina does none of this. A gain is federal AGI, federal AGI is the starting point for the state return, and the flat rate applies to what is left after the state’s own standard deduction of $12,750 for a single filer or $25,500 for a couple.
2027 is a determination, not a statute
The Department’s page ends with a sentence worth reading twice: "Additional rate changes may apply to tax years beginning with 2027 based on certain rate reduction triggers." Session Law 2023-134 ties further cuts to General Fund revenue meeting targets. Whether the rate falls again is decided by the revenue figures and a formal determination, not by a number already in the statute.
That puts North Carolina in the same category as Michigan and Oklahoma on this site: a state where the rate for a future year cannot be read from the code, only from a later announcement. This page carries 3.99% for 2026 because the Department states it outright. It assumes nothing about 2027, and neither should anyone planning a sale for that year.
Why this figure was replaced even though it did not change
North Carolina previously appeared in this site’s data with the same 3.99%, sourced from a tax-policy survey, and was deliberately not computed. The number was right. The standing of the number was not: that same source class had Washington at a 9% rate that does not exist and Georgia at 5.19% against a flat 4.99%, so a match on one state proves nothing about the next. The legislature’s website still blocks automated readers, so the statute, G.S. 105-153.7, has not been read directly; the Department of Revenue’s published schedule is the operative source, as it is for Georgia and Michigan.
Flat means the holding period only matters federally
Because every dollar of gain meets the same 3.99%, North Carolina is indifferent to whether you held for eleven months or eleven years. The entire reward for patience is federal: the 0/15/20% ladder against ordinary rates that reach 37%. For a North Carolina seller the decision to wait for the one-year mark is made on federal grounds alone, and the state figure will be the same either way.
The flip side shows at low incomes. A modest gain that falls entirely inside the federal 0% band pays nothing to Washington and still pays 3.99% to Raleigh. The second example below is that case, and it is the only situation where the state charge is the whole bill.
North Carolina against its verified neighbours
Two of the bordering states have been read from primary sources here. Virginia runs a graduated ladder whose 5.75% top rate begins at $17,000, so a Virginian pays nearly 5.75% on almost any gain — roughly forty-four percent more than the North Carolina rate on the same sale. Georgia is flat at 4.99%, a full point higher. South Carolina and Tennessee have not been verified from a primary source on this site and are not quoted.
Among the states this calculator computes, only Pennsylvania at 3.07%, Indiana at 2.95% and Ohio at 2.75% charge less on a gain, and none of the three is a neighbour. For a Southeastern seller with a choice of residence, North Carolina is the cheapest verified state with an income tax at all.
What North Carolina does not change
The state layer here is 3.99% of the taxable gain, applied to the gain after federal netting. North Carolina’s own return starts from federal AGI and subtracts its own standard or itemised deduction, which is not modelled; for a gain of any real size the difference is small, because a flat rate on a slightly different base moves the answer by a few hundred dollars at most.
On the federal side nothing is different in Raleigh than anywhere else. The preferential ladder, the 3.8% net investment income tax, the home-sale exclusion and depreciation recapture are all computed first and identically, and the state charge is added to the result.
A worked North Carolina 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.
A $100,000 gain on an $80,000 salary
A single filer in North Carolina earning $80,000 sells long-held shares for a $100,000 gain.
- Taxable income after deduction
- $163,900
- Taxable gain
- $100,000
- Tax owed without the sale
- $8,770
- Tax the sale added
- $15,000
- Total federal tax
- $23,770
- North Carolina state tax
- $3,990
- Effective rate on the gain
- 15%
The state charge is 3.99% of the gain, exactly — there is no ladder to soften or sharpen it. The federal side does the varying: this gain lands entirely in the 15% band, and no net investment income tax applies at this income.
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 inside ordinaryIncome 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$100,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $180,000 less $16,100.
- Taxable income$163,900
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%$2,970
$13,500 of taxable income between $50,400 and $63,900.
- Ordinary income stacked below the long-term gain$63,900
Long-term gain is taxed by reference to where it sits ON TOP of $63,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$15,000
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Net investment income tax threshold$200,000
Modified AGI of $180,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax does not apply$0
Modified AGI is $20,000 below the threshold.
- North Carolina income tax at 3.99%$3,990
Flat 3.99% for taxable years after 2025, taxing capital gains as ordinary income with no preferential rate, exclusion or capital gains schedule. NCDOR: "For Taxable Years after 2025, the North Carolina individual income tax rate is 3.99% (0.0399)." Further reductions from 2027 depend on revenue triggers under Session Law 2023-134 and are not assumed.
- Total tax$27,760
$27,760 on $180,000 of total income, an effective rate of 15.42%.
A gain the federal system ignores and the state does not
A single filer earning $30,000 sells for a $15,000 gain, which sits inside the federal 0% long-term band.
- Taxable income after deduction
- $28,900
- Taxable gain
- $15,000
- Tax owed without the sale
- $1,420
- Tax the sale added
- $0
- Total federal tax
- $1,420
- North Carolina state tax
- $598.50
- Effective rate on the gain
- 0%
Federal tax on the gain is zero. North Carolina still takes 3.99% of it, because the flat rate has no zero band and no regard for the federal one. At this income the state is the entire bill.
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 inside ordinaryIncome are also net investment income under IRC 1411(c) and are not counted here.
Show the working — 12 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$15,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $45,000 less $16,100.
- Taxable income$28,900
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%$180
$1,500 of taxable income between $12,400 and $13,900.
- Ordinary income stacked below the long-term gain$13,900
Long-term gain is taxed by reference to where it sits ON TOP of $13,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 0%$0
Taxable income stays at or below the $49,450 maximum zero-rate amount.
- Net investment income tax threshold$200,000
Modified AGI of $45,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax does not apply$0
Modified AGI is $155,000 below the threshold.
- North Carolina income tax at 3.99%$598.50
Flat 3.99% for taxable years after 2025, taxing capital gains as ordinary income with no preferential rate, exclusion or capital gains schedule. NCDOR: "For Taxable Years after 2025, the North Carolina individual income tax rate is 3.99% (0.0399)." Further reductions from 2027 depend on revenue triggers under Session Law 2023-134 and are not assumed.
- Total tax$2,018.50
$2,018.50 on $45,000 of total income, an effective rate of 4.49%.
What this calculator does not cover for North Carolina
The North Carolina figure stacks your gain on your federal ordinary taxable income. North Carolina 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
- VirginiaTop rate of 5.75% from just $17,000, on 1990 thresholds.
- GeorgiaFlat 4.99% — not the 5.19% still widely published.
- FloridaNo income tax by constitutional amendment. Federal tax still applies.
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.