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 Pennsylvania taxes a capital gain
Statutory authority: 72 P.S. § 7302; Pa. Dept. of Revenue, Tax Rates
A flat 3.07%, and no holding-period distinction at all
Pennsylvania levies a flat 3.07% personal income tax, among the lowest state rates in the country. Capital gains are taxed at that rate with no preferential treatment.
Pennsylvania also draws no distinction whatever between short-term and long-term gains. Selling an asset after eleven months and after eleven years produces the same state bill. This is genuinely different from the federal treatment, where the one-year line can more than double the rate, and it means the holding-period planning that dominates federal decisions is irrelevant at Pennsylvania level.
Eight classes of income, and gains are one of them
Pennsylvania does not compute a single figure of total income the way the federal system does. It taxes eight separate classes — compensation, interest, dividends, net profits from a business, net gains from the sale of property, rents and royalties, gambling winnings, and income from estates or trusts — each computed on its own terms.
Net gains from the sale, exchange or disposition of property is one of those classes. The structure matters because of what it prevents: income and losses generally do not move between classes.
The loss rules are the trap, and they are not the federal ones
Pennsylvania does not follow the federal capital loss regime, and the differences all run against the taxpayer. There is no equivalent of the federal $3,000 annual deduction against ordinary income. There is generally no indefinite carryforward of unused losses to future years. And a net loss in the gains class generally cannot be used to reduce your other classes of income.
The practical effect is that a bad year is simply a bad year: a Pennsylvania resident with a large realised loss may get federal relief spread across many future returns while getting nothing at state level. This calculator applies the flat rate to positive gains, which is correct for a gain year — but do not rely on it for a loss year without checking the current Pennsylvania rules, because the engine models the federal loss treatment rather than Pennsylvania's.
Local taxes generally do not reach investment gains
Pennsylvania municipalities and school districts levy their own earned income taxes, commonly around 1%. These are generally taxes on earned income — wages and net profits — and generally do not reach capital gains.
That is a helpful contrast with New York or Maryland, where the local layer does reach investment income and can add several percentage points. In Pennsylvania the state figure is usually the whole state-and-local story for a securities sale, but the rules are set locally and are worth confirming for your own jurisdiction.
A worked Pennsylvania 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 short-term flip, taxed the same as a long hold
A single Pennsylvania resident earning $120,000 sells shares held for eight months at a $200,000 gain. Federally this is punished; at state level it makes no difference.
- Taxable income after deduction
- $303,900
- Taxable gain
- $200,000
- Tax owed without the sale
- $17,570
- Tax the sale added
- $62,124.25
- of which net investment income tax
- $4,560
- Total federal tax
- $79,694.25
- Pennsylvania state tax
- $6,140
- Effective rate on the gain
- 31.06%
Pennsylvania charges 3.07% here, exactly as it would on a ten-year hold. The federal treatment is where the holding period bites — compare this with the same gain held long-term and the federal figure changes dramatically.
Caveats on this example (2)
- 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.
- Pennsylvania: local income taxes are not modelled and apply on top of the state figure. Pennsylvania localities levy separate earned income taxes, which generally do not reach capital gains.
Show the working — 15 steps, each with its citation
- Net short-term capital gain or loss for the year$200,000
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$200,000
Short-term capital gain has no preferential rate.
- Standard deduction-$16,100
Adjusted gross income of $320,000 less $16,100.
- Taxable income$303,900
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%$16,686.25
$47,675 of taxable income between $256,225 and $303,900.
- Net investment income tax threshold$200,000
Modified AGI of $320,000 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%$4,560
3.8% of $120,000, the lesser of net investment income ($200,000) and the amount by which modified AGI exceeds the threshold ($120,000). Here the binding figure is the excess of modified AGI over the threshold.
- Pennsylvania income tax at 3.07%$6,140
Flat 3.07% personal income tax. Pennsylvania taxes net gains from the sale of property as one of its eight separate classes of income, at the same 3.07% rate, with NO distinction between short-term and long-term. CAUTION, not modelled: Pennsylvania does not follow the federal capital loss rules - a net loss in this class generally cannot offset other classes and there is no federal-style $3,000 deduction or indefinite carryforward. Confirm before computing a loss year.
- Total tax$85,834.25
$85,834.25 on $320,000 of total income, an effective rate of 26.82%.
What this calculator does not cover for Pennsylvania
The Pennsylvania figure stacks your gain on your federal ordinary taxable income. Pennsylvania 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
- New JerseyOrdinary income to 10.75%. Fixed thresholds, and no loss carryforward.
- New YorkOrdinary income, nine brackets to 10.9%. NYC and Yonkers add their own.
- OhioA single 2.75% rate from 2026, above an indexed floor.
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.