Wealthy Americans likely breathed a collective sigh of relief when President Joe Biden revealed his $2 trillion infrastructure plan.
Despite the president's campaign pledge to raise the capital gains tax rate, the new plan doesn't include any changes in that regard.
However, when it comes to capital gains tax, it's not just the federal tax rate that matters. States can also set their own tax rates, and some may have changes on the horizon. In the state of Washington, the governor has proposed a capital gains tax that could raise almost $1 billion if passed.
To provide the most recent info on capital gains taxes, we've collected data on long and short-term capital gains tax rates at both the federal and state level.
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Federal capital gains tax rates
State capital gains tax rates
Outside experts weigh in
What is capital gains tax?
Capital gains tax is the tax you pay after selling an asset that has increased in value. Assets subject to capital gains tax include stocks, real estate, cryptocurrency, and businesses. You pay capital gains tax on the profit you made from the sale.
Most investment income is considered a capital gain, but there are some exceptions. Dividends are counted as ordinary income, for example, but qualified dividends are treated as a capital gain.
For example, if you buy a stock for $100 and sell it for $150, you have a capital gain of $50. You'd pay capital gains tax on that $50. Capital gains are an essential part of understanding how investing and taxes work.
There are exclusions for certain types of capital gains that can help you reduce your taxes. The home sale exclusion is one of the most common. If you've owned and used your house as your main home for at least two out of five years prior to its date of sale, you can exclude up to $250,000 in capital gains if you're a single filer or $500,000 if you're filing jointly with your spouse.
It's also worth noting that only a realized gain can be a capital gain. If you have a stock that goes up in value, but you don't sell it, that's an unrealized gain and isn't taxed.
What is short-term capital gains tax?
Short-term capital gains tax is what you pay on assets that you sell within a year of acquiring them. If you bought a share of Tesla (NASDAQ:TSLA) and sold it for a profit six months later, you would pay short-term capital gains tax.
This type of capital gain is taxed as ordinary taxable income on your federal taxes.
What is long-term capital gains tax?
Long-term capital gains tax is what you pay on assets that you sell after owning them for more than a year. If you bought Bitcoin (CRYPTO:BTC) in 2018 and sold it for a profit in 2020, that's a long-term capital gain. So you'd include that on your tax return and pay long-term capital gains tax.
(Note: because you report the realized gain on your asset, it's important to keep track of your cost basis -- fortunately, stockbrokers do this for you, but you'll need to do it yourself on things like property and businesses.)
Federal tax rates are lower for long-term capital gains, which is why it's generally recommended to hold assets for at least a year to minimize your tax liability. If you're generating capital gains, tax planning is extra-important.
2021 federal capital gains tax rates
The tables below show marginal tax rates. This means that different portions of your taxable income may be taxed at different rates.
For example, a single filer who made $10,000 would pay 10% income tax on their first $9,950 and 12% on the remaining $50. That's a total of $1,001 in tax and an overall tax rate of 10.01%.
Federal short-term capital gains tax rates
Federal tax rates on short-term capital gains are equal to income tax rates. Here are the 2021 short-term capital gains and income tax rates:
| Federal short-term capital gains/income tax rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 10% | Up to $9,950 | Up to $19,900 | Up to $9,950 | Up to $14,200 |
| 12% | $9,951 to $40,525 | $19,901 to $81,050 | $9,951 to $40,525 | $14,201 to $54,200 |
| 22% | $40,526 to $86,375 | $81,051 to $172,750 | $40,526 to $86,375 | $54,201 to $86,350 |
| 24% | $86,376 to $164,925 | $172,751 to $329,850 | $86,376 to $164,925 | $86,351 to $164,900 |
| 32% | $164,926 to $209,425 | $329,851 to $418,850 | $164,926 to $209,425 | $164,901 to $209,400 |
| 35% | $209,426 to $523,600 | $418,851 to $628,300 | $209,426 to $314,150 | $209,401 to $523,600 |
| 37% | Over $523,600 | Over $628,300 | Over $314,150 | Over $523,600 |
Data source: Internal Revenue Service (2020).
Federal long-term capital gains tax rates
Remember that long-term capital gains rates apply to assets that you sold after holding them for at least a year.
| Federal long-term capital gains tax rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 0% | Up to $40,400 | Up to $80,800 | Up to $40,400 | Up to $54,100 |
| 15% | $40,401 to $445,850 | $80,801 to $501,600 | $40,401 to $250,800 | $54,101 to $473,750 |
| 20% | Over $445,850 | Over $501,600 | Over $250,800 | Over $473,750 |
Data source: Internal Revenue Service (2020).
State capital gains tax rates
Each state has its own method of taxing capital gains. Most states tax capital gains as income. In states that do this, the state income tax applies to both long- and short-term capital gains.
Keep in mind that if your state taxes capital gains as income, you'll add your capital gains to your other ordinary income, which may put you in a higher tax bracket.
There are also plenty of states that handle capital gains differently. Some allow taxpayers to deduct a certain amount of capital gains. Others don't tax income or capital gains at all.
The sections below cover every state's tax laws for capital gains. Keep in mind that many states have special rules that apply to the sale of certain assets, such as exclusions for collectibles purchased before a certain year.
Not every rule for every situation is included. Taxpayers should always review the capital gains rules in their state so they know about any relevant exceptions.
Also, it's important to note that this is the most recent data for each state at the time of this writing -- to get exact figures, taxpayers should consult their state's online documentation. If you have questions about capital gains on your tax return, it's a good idea to consult that documentation or a tax professional.
Alabama
Alabama taxes capital gains as income.
Alabama income and capital gains tax rates
| Tax rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 2% | Up to $500 | Up to $1,000 | Up to $500 | Up to $500 |
| 4% | $501 to $3,000 | $1,001 to $6,000 | $501 to $3,000 | $501 to $3,000 |
| 5% | Over $3,000 | Over $6,000 | Over $3,000 | Over $3,000 |
Data source: Alabama Department of Revenue.
Alaska
Alaska does not tax personal income or capital gains.
Arizona
Arizona taxes capital gains as income.
Arizona income and capital gains tax rates
| Tax rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 2.59% | Up to $27,272 | Up to $54,544 | Up to $27,272 | Up to $54,544 |
| 3.34% | $27,273 to $54,544 | $54,545 to $109,088 | $27,273 to $54,544 | $54,545 to $109,088 |
| 4.17% | $54,545 to $163,632 | $109,089 to $327,263 | $54,545 to $163,632 | $109,089 to $327,263 |
| 4.50% | Over $163,632 | Over $327,263 | Over $163,632 | Over $327,263 |
Data source: Arizona Department of Revenue.
Arkansas
In Arkansas, 50% of long-term capital gains are treated as income. All short-term capital gains are treated as income. Tax rates are the same for every filing status.
Arkansas income and capital gains tax rates
| Tax rate | Annual income under $22,200 |
|---|---|
| 0% | Up to $4,499 |
| 2% | $4,500 to $8,899 |
| 3% | $8,900 to $13,399 |
| 3.4% | $13,400 to $22,199 |
| Tax rate | Annual income between $22,200 and $79,300 |
|---|---|
| 0.75% | Up to $4,499 |
| 2.5% | $4,500 to $8,899 |
| 3.5% | $8,900 to $13,399 |
| 4.5% | $13,400 to $22,199 |
| 5% | $22,200 to $37,199 |
| 6% | $37,200 to $79,300 |
| Tax rate | Annual income over $79,300 |
|---|---|
| 2% | Up to $4,000 |
| 4% | $4,001 to $8,000 |
| 5.9% | $8,001 and above |
Data source: Arkansas Economic Development Commission.
Incomes between the amounts of $79,300 and $84,600 also reduce the amount of income tax due as follows:
- $79,301 to $80,300: $440
- $80,301 to $81,300: $340
- $81,301 to $82,500: $240
- $82,501 to $83,600: $140
- $83,601 to $84,600: $40
- $84,601 and above: $0
California
California taxes capital gains as income.
California income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
1% |
Up to $8,932 |
$0 to $17,864 |
Up to $8,932 |
$0 to $17,864 |
|
2% |
$8,933 to $21,175 |
$17,865 to $42,350 |
$8,933 to $21,175 |
$17,865 to $42,353 |
|
4% |
$21,176 to $33,421 |
$42,351 to $66,842 |
$21,176 to $33,421 |
$42,354 to $54,597 |
|
6% |
$33,422 to $46,394 |
$66,843 to $92,788 |
$33,422 to $46,394 |
$54,598 to $67,569 |
|
8% |
$46,395 to $58,634 |
$92,789 to $117,268 |
$46,395 to $58,634 |
$67,570 to $79,812 |
|
9.3% |
$58,635 to $299,508 |
$117,269 to $599,016 |
$58,635 to $299,508 |
$79,813 to $407,329 |
|
10.3% |
$299,509 to $359,407 |
$599,017 to $718,814 |
$299,509 to $359,407 |
$407,330 to $488,796 |
|
11.3% |
$359,408 to $599,012 |
$718,815 to $1,198,024 |
$359,408 to $599,012 |
$488,797 to $814,658 |
|
12.3% |
Over $599,012 | $1,198,025 or more | Over $599,012 | $814,659 or more |
Data source: State of California Franchise Tax Board.
Colorado
Colorado taxes capital gains as income. The state income tax is a flat rate of 4.63%.
Connecticut
Connecticut has a capital gains tax of 7%. This applies to long-term and short-term capital gains.
Delaware
Delaware taxes capital gains as income. Tax rates are the same for every filing status.
Delaware income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
0% |
Up to $1,999 |
|
2.2% |
$2,000 to $4,999 |
|
3.9% |
$5,000 to $9,999 |
|
4.8% |
$10,000 to $19,999 |
|
5.2% |
$20,000 to $24,999 |
|
5.55% |
$25,000 to $59,999 |
|
6.6% |
$60,000 or higher |
Data source: Delaware Division of Revenue.
Florida
Florida does not tax personal income or capital gains.
Georgia
Georgia taxes capital gains as income.
Georgia income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
1.00% |
Up to $750 |
Up to $1,000 |
Up to $500 |
Up to $1,000 |
|
2.00% |
$751 to $2,250 |
$1,001 to $3,000 |
$501 to $1,500 |
$1,001 to $3,000 |
|
3.00% |
$2,251 to $3,750 |
$3,001 to $5,000 |
$1,501 to $2,500 |
$3,001 to $5,000 |
|
4.00% |
$3,751 to $5,250 |
$5,001 to $7,000 |
$2,501 to $3,500 |
$5,001 to $7,000 |
|
5.00% |
$5,251 to $7,000 |
$7,001 to $10,000 |
$3,501 to $5,000 |
$7,001 to $10,000 |
|
5.75% |
Over $7,000 |
Over $10,000 |
Over $5,000 |
Over $10,000 |
Data source: Georgia Department of Revenue.
Hawaii
Hawaii's capital gains tax rate is 7.25%. That applies to both long- and short-term capital gains. There is currently a bill that, if passed, would increase the capital gains tax in Hawaii to 11.00% and would also increase the state's income tax.
Idaho
Idaho taxes capital gains as income.
Idaho income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
1.125% |
Up to $1,567 |
Up to $3,135 |
Up to $1,567 |
Up to $3,135 |
|
3.125% |
$1,568 to $3,135 |
$3,136 to $6,271 |
$1,568 to $3,135 |
$3,136 to $6,271 |
|
3.625% |
$3,136 to $4,703 |
$6,272 to $9,407 |
$3,136 to $4,703 |
$6,272 to $9,407 |
|
4.625% |
$4,704 to $6,271 |
$9,408 to $12,543 |
$4,704 to $6,271 |
$9,408 to $12,543 |
|
5.625% |
$6,272 to $7,839 |
$12,544 to $15,679 |
$6,272 to $7,839 |
$12,544 to $15,679 |
|
6.625% |
$7,840 to $11,759 |
$15,680 to $23,519 |
$7,840 to $11,759 |
$15,680 to $23,519 |
|
6.925% |
Over $11,759 |
Over $23,519 |
Over $11,759 |
Over $23,519 |
Data source: Idaho State Tax Commission.
Illinois
Illinois taxes capital gains as income. The Illinois state income tax is a flat rate of 4.95%.
Indiana
Indiana taxes capital gains as income. The Indiana state income tax is a flat rate of 3.23%.
Iowa
Iowa taxes capital gains as income. Tax rates are the same for every filing status.
Iowa income and capital gains tax rate
|
Tax rate |
Income |
|---|---|
|
0.33% |
Up to $1,676 |
|
0.67% |
$1,677 to $3,352 |
|
2.25% |
$3,353 to $6,704 |
|
4.14% |
$6,705 to $15,084 |
|
5.63% |
$15,085 to $25,140 |
|
5.96% |
$25,141 to $33,520 |
|
6.25% |
$33,521 to $50,280 |
|
7.44% |
$50,281 to $75,420 |
|
8.53% |
Over $75,420 |
Data source: Iowa Department of Revenue.
Kansas
Kansas taxes capital gains as income.
Kansas income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
3.10% |
Up to $15,000 |
Up to $30,000 |
Up to $15,000 |
Up to $15,000 |
|
5.25% |
$15,001 to $30,000 |
$30,001 to $60,000 |
$15,001 to $30,000 |
$15,001 to $30,000 |
|
5.70% |
Over $30,000 |
Over $60,000 |
Over $30,000 |
Over $30,000 |
Data source: Kansas Department of Revenue.
Kentucky
Kentucky taxes capital gains as income. The Kentucky state income tax is a flat rate of 5%.
Louisiana
Louisiana taxes capital gains as income.
Louisiana income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
2% |
Up to $12,500 |
Up to $25,000 |
Up to $12,500 |
Up to $12,500 |
|
4% |
$12,501 to $50,000 |
$25,001 to $100,000 |
$12,501 to $50,000 |
$12,501 to $50,000 |
|
6% |
Over $50,000 |
Over $100,000 |
Over $50,000 |
Over $50,000 |
Data source: Louisiana Department of Revenue.
Maine
Maine taxes capital gains as income.
Maine income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
5.80% |
Up to $22,199 |
Up to $44,449 |
Up to $22,199 |
Up to $33,299 |
|
6.75% |
$22,200 to $52,599 |
$44,450 to $105,199 |
$22,200 to $52,599 |
$33,300 to $78,899 |
|
7.15% |
$52,600 or more |
$105,200 or more |
$52,600 or more |
$78,900 or more |
Data source: Maine Revenue Services.
Maryland
Maryland taxes capital gains as income.
Maryland income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
2.00% |
Up to $1,000 |
Up to $1,000 |
Up to $1,000 |
Up to $1,000 |
|
3.00% |
$1,001 to $2,000 |
$1,001 to $2,000 |
$1,001 to $2,000 |
$1,001 to $2,000 |
|
4.00% |
$2,001 to $3,000 |
$2,001 to $3,000 |
$2,001 to $3,000 |
$2,001 to $3,000 |
|
4.75% |
$3,001 to $100,000 |
$3,001 to $150,000 |
$3,001 to $100,000 |
$3,001 to $150,000 |
|
5.00% |
$100,001 to $125,000 |
$150,001 to $175,000 |
$100,001 to $125,000 |
$150,001 to $175,000 |
|
5.25% |
$125,001 to $150,000 |
$175,001 to $225,000 |
$125,001 to $150,000 |
$175,001 to $225,000 |
|
5.50% |
$150,001 to $250,000 |
$225,001 to $300,000 |
$150,001 to $250,000 |
$225,001 to $300,000 |
|
5.75% |
Over $250,000 |
Over $300,000 |
Over $250,000 |
Over $300,000 |
Data source: Comptroller of Maryland.
Massachusetts
Massachusetts taxes both income and most long-term capital gains at a flat rate of 5%. There are, however, certain types of capital gains that are taxed at 12% in Massachusetts. The 12% capital gains tax applies to the following:
- Short-term capital gains.
- Long-term capital gains on collectibles and pre-1996 installment sales.
- Gains on the sale of a property when used in a trade or business for one year or less.
Michigan
Michigan taxes capital gains as income. The Michigan state income tax is a flat rate of 4.25%.
Minnesota
Minnesota taxes capital gains as income.
Minnesota income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
5.35% |
Up to $27,230 |
Up to $39,810 |
Up to $19,905 |
Up to $33,520 |
|
6.80% |
$27,231 to $89,440 |
$39,811 to $158,140 |
$19,906 to $79,107 |
$33,521 to $134,700 |
|
7.85% |
$89,441 to $166,040 |
$158,141 to $276,200 |
$79,108 to $138,100 |
$134,701 to $220,730 |
|
9.85% |
Over $166,040 |
Over $276,200 |
Over $138,100 |
Over $220,730 |
Data source: Minnesota Department of Revenue.
Mississippi
Mississippi taxes capital gains as income. Tax rates are the same for every filing status.
Mississippi income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
0% |
Up to $3,000 |
|
3% |
$3,001 to $5,000 |
|
4% |
$5,001 to $10,000 |
|
5% |
Over $10,000 |
Data source: Mississippi Department of Revenue.
Missouri
Missouri taxes capital gains as income. Tax rates are the same for every filing status.
Missouri income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
0% |
Up to $106 |
|
1.5% |
$107 to $1,073 |
|
2% |
$1,074 to $2,146 |
|
2.5% |
$2,147 to $3,219 |
|
3% |
$3,220 to $4,292 |
|
3.5% |
$4,293 to $5,365 |
|
4% |
$5,366 to $6,438 |
|
4.5% |
$6,439 to $7,511 |
|
5% |
$7,512 to $8,584 |
|
5.4% |
Over $8,584 |
Data source: Missouri Department of Revenue.
Montana
Montana taxes capital gains as income, but it has a 2% capital gains credit. Since its highest income tax rate is 6.9%, its highest capital gains tax rate is 4.9%. Tax rates are the same for every filing status.
Montana income tax rates
|
Tax rate |
Income |
|---|---|
|
1% |
Up to $3,100 |
|
2% |
$3,101 to $5,500 |
|
3% |
$5,501 to $8,400 |
|
4% |
$8,401 to $11,300 |
|
5% |
$11,301 to $14,500 |
|
6% |
$14,501 to $18,700 |
|
6.9% |
Over $18,700 |
Data source: Montana Department of Revenue.
Nebraska
Nebraska taxes capital gains as income.
Nebraska income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
2.46% |
Up to $3,340 |
Up to $6,660 |
Up to $3,340 |
Up to $6,220 |
|
3.51% |
$3,341 to $19,990 |
$6,661 to $39,990 |
$3,341 to $19,990 |
$6,221 to $31,990 |
|
5.01% |
$19,991 to $32,210 |
$39,991 to $64,430 |
$19,991 to $32,210 |
$31,991 to $47,760 |
|
6.84% |
Over $32,210 |
Over $64,430 |
Over $32,210 |
Over $47,760 |
Data source: Nebraska Department of Revenue.
Nevada
Nevada does not tax personal income or capital gains.
New Hampshire
New Hampshire does not tax personal income or capital gains.
New Jersey
New Jersey taxes capital gains as income.
New Jersey income and capital gains tax rates
|
Tax rate |
Single and married filing separately |
|---|---|
|
1.40% |
Up to $20,000 |
|
1.75% |
$20,001 to $35,000 |
|
3.50% |
$35,001 to $40,000 |
|
5.525% |
$40,001 to $75,000 |
|
6.37% |
$75,001 to $500,000 |
|
8.97% |
$500,001 to $5,000,000 |
|
10.75% |
Over $5,000,000 |
|
Tax rate |
Married filing jointly and head of household |
|---|---|
|
1.40% |
Up to $20,000 |
|
1.75% |
$20,001 to $50,000 |
|
2.45% |
$50,001 to $70,000 |
|
3.50% |
$70,001 to $80,000 |
|
5.525% |
$80,001 to $150,000 |
|
6.37% |
$150,001 to $500,000 |
|
8.97% |
$500,000 to $5,000,000 |
|
10.75% |
Over $5,000,000 |
Data source: New Jersey Division of Taxation.
New Mexico
New Mexico taxes capital gains as income. The state allows filers to deduct either 40% of capital gains income or $1,000, whichever is greater.
New Mexico income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
1.70% |
Up to $5,500 |
Up to $8,000 |
Up to $4,000 |
Up to $8,000 |
|
3.20% |
$5,501 to $11,000 |
$8,001 to $16,000 |
$4,401 to $8,000 |
$8,001 to $16,000 |
|
4.70% |
$11,001 to $16,000 |
$16,001 to $24,000 |
$8,001 to $12,000 |
$16,001 to $24,000 |
|
4.90% |
$16,001 to $210,000 |
$24,001 to $315,000 |
$12,001 to $157,500 |
$24,001 to $315,000 |
|
5.90% |
Over $210,000 |
Over $315,000 |
Over $157,500 |
Over $315,000 |
Data source: Tax News Update U.S. Edition.
New York
New York taxes capital gains as income.
New York income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
4.00% |
Up to $8,500 |
Up to $17,150 |
Up to $8,500 |
Up to $12,800 |
|
4.50% |
$8,501 to $11,700 |
$17,151 to $23,600 |
$8,501 to $11,700 |
$12,801 to 17,650 |
|
5.25% |
$11,701 to $13,900 |
$23,601 to $27,900 |
$11,701 to $13,900 |
$17,651 to $20,900 |
|
5.90% |
$13,901 to $21,400 |
$27,901 to $43,000 |
$13,901 to $21,400 |
$20,901 to $32,200 |
|
6.09% |
$21,401 to $80,650 |
$43,001 to $161,550 |
$21,401 to $80,650 |
$32,201 to $107,650 |
|
6.41% |
$80,651 to $215,400 |
$161,551 to $323,200 |
$80,651 to $215,400 |
$107,651 to $269,300 |
|
6.85% |
$215,401 to $1,077,550 |
$323,201 to $2,155,350 |
$215,401 to $1,077,550 |
$269,301 to $1,616,450 |
|
8.82% |
Over $1,077,550 |
Over $2,155,350 |
Over $1,077,550 |
Over $1,616,450 |
Data source: New York State Department of Taxation and Finance.
North Carolina
North Carolina taxes capital gains as income. The North Carolina state income tax is a flat rate of 5.25%.
North Dakota
North Dakota taxes capital gains as income. The state allows filers to deduct 40% of capital gains income.
North Dakota income tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
1.10% |
Up to $40,525 |
Up to $67,700 |
Up to $33,850 |
Up to $54,300 |
|
2.04% |
$40,526 to $98,100 |
$67,701 to $163,550 |
$33,851 to $81,775 |
$54,301 to $140,200 |
|
2.27% |
$98,101 to $204,675 |
$163,551 to $249,150 |
$81,776 to $124,575 |
$140,201 to $226,950 |
|
2.64% |
$204,676 to $445,000 |
$249,151 to $445,000 |
$124,576 to $222,500 |
$226,951 to $445,000 |
|
2.90% |
Over $445,000 |
Over $445,000 |
Over $222,500 |
Over $445,000 |
Data source: North Dakota Office of State Tax Commissioner.
Ohio
Ohio taxes capital gains as income. Tax rates are the same for every filing status.
Ohio income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
0.00% |
Up to $22,150 |
|
2.85% |
$22,151 to $44,250 |
|
3.326% |
$44,251 to $88,450 |
|
3.802% |
$88,451 to $110,650 |
|
4.413% |
$110,651 to $221,300 |
|
4.797% |
Over $221,300 |
Data source: Ohio Department of Taxation.
Oklahoma
Oklahoma taxes capital gains as income. Taxpayers can deduct 100% of their capital gains resulting from
- the sale of property in Oklahoma that was owned for at least five uninterrupted years; or
- the sale of stock or ownership interest in an Oklahoma company, limited liability company, or partnership where the stock or ownership interest was held for at least two uninterrupted years.
Oklahoma income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
0.50% |
Up to $1,000 |
Up to $2,000 |
Up to $1,000 |
Up to $2,000 |
|
1.00% |
$1,001 to $2,500 |
$2,001 to $5,000 |
$1,001 to $2,500 |
$2,001 to $5,000 |
|
2.00% |
$2,501 to $3,750 |
$5,001 to $7,500 |
$2,501 to $3,750 |
$5,001 to $7,500 |
|
3.00% |
$3,751 to $4,900 |
$7,501 to $9,800 |
$3,751 to $4,900 |
$7,501 to $9,800 |
|
4.00% |
$4,901 to $7,200 |
$9,801 to $12,200 |
$4,901 to $7,200 |
$9,801 to $12,200 |
|
5.00% |
Over $7,200 |
Over $12,200 |
Over $7,200 |
Over $12,200 |
Data source: Oklahoma Tax Commission.
Oregon
Oregon taxes capital gains as income.
Oregon income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
4.75% |
Up to $3,600 |
Up to $7,200 |
Up to $3,600 |
Up to $7,200 |
|
6.75% |
$3,601 to $9,050 |
$7,201 to $18,100 |
$3,601 to $9,050 |
$7,201 to $18,100 |
|
8.75% |
$9,051 to $125,000 |
$18,101 to $250,000 |
$9,051 to $125,000 |
$18,101 to $250,000 |
|
9.90% |
Over $125,000 |
Over $250,000 |
Over $125,000 |
Over $250,000 |
Data source: Oregon Department of Revenue.
Pennsylvania
Pennsylvania taxes capital gains as income. The Pennsylvania state income tax is a flat rate of 3.07%.
Rhode Island
Rhode Island taxes capital gains as income. Tax rates are the same for every filing status.
Rhode Island income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
3.75% |
Up to $66,200 |
|
4.75% |
$66,201 to $150,550 |
|
5.99% |
Over $150,550 |
Data source: Rhode Island Department of Revenue.
South Carolina
South Carolina taxes capital gains as income. On long-term capital gains, taxpayers are allowed a deduction of 44%.
South Carolina income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
0.00% |
Up to $3,070 |
|
3.00% |
$3,071 to $6,150 |
|
4.00% |
$6,151 to $9,230 |
|
5.00% |
$9,231 to $12,310 |
|
6.00% |
$12,311 to $15,400 |
|
7.00% |
Over $15,400 |
Data source: South Carolina Department of Revenue.
South Dakota
South Dakota does not tax personal income or capital gains.
Tennessee
Tennessee does not tax personal income or capital gains.
Texas
Texas does not tax personal income or capital gains.
Utah
Utah taxes capital gains as income. The Utah state income tax is a flat rate of 4.95%.
Vermont
Vermont taxes short-term capital gains and long-term capital gains held for up to three years as income. Taxpayers are allowed to exclude up to 40% of capital gains on assets held longer than three years. This exclusion amount is capped at $350,000 and cannot exceed 40% of federal taxable income.
Vermont income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
3.35% |
Up to $40,350 |
Up to $67,450 |
Up to $33,725 |
Up to $54,100 |
|
6.60% |
$40,351 to $97,800 |
$67,451 to $163,000 |
$33,726 to $81,500 |
$54,101 to $139,650 |
|
7.60% |
$97,801 to $204,000 |
$163,001 to $248,350 |
$81,501 to $124,175 |
$139,651 to $226,200 |
|
8.75% |
Over $204,000 |
Over $248,350 |
Over $124,175 |
Over $226,200 |
Data source: Vermont Department of Taxes.
Virginia
Virginia taxes capital gains as income.
Virginia income and capital gains tax rates
|
Tax rate |
Income |
|---|---|
|
2.00% |
Up to $3,000 |
|
3.00% |
$3,001 to $5,000 |
|
5.00% |
$5,001 to $17,000 |
|
5.75% |
Over $17,000 |
Data source: Virginia Department of Taxation.
Washington
Washington doesn't tax personal income or capital gains. There is currently a proposed bill that would tax long-term capital gains earnings above $25,000 for individual filers and above $50,000 for joint filers.
West Virginia
West Virginia taxes capital gains as income.
West Virginia income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
3.00% |
Up to $9,999 |
Up to $9,999 |
Up to $4,999 |
Up to $9,999 |
|
4.00% |
$10,000 to $24,999 |
$10,000 to $24,999 |
$5,000 to $12,499 |
$10,000 to $24,999 |
|
4.50% |
$25,000 to $39,999 |
$25,000 to $39,999 |
$12,500 to $19,999 |
$25,000 to $39,999 |
|
6.00% |
$40,000 to $59,999 |
$40,000 to $59,999 |
$20,000 to $29,999 |
$40,000 to $59,999 |
|
6.50% |
$60,000 or more |
$60,000 or more |
$30,000 or more |
$60,000 or more |
Data source: West Virginia State Tax Department.
Wisconsin
Wisconsin taxes capital gains as income. On long-term capital gains, taxpayers are allowed a deduction of 30%, or 60% if the capital gain resulted from the sale of farm assets.
Wisconsin income and capital gains tax rates
|
Tax rate |
Single |
Married filing jointly |
Married filing separately |
Head of household |
|---|---|---|---|---|
|
3.54% |
Up to $11,970 |
Up to $15,960 |
Up to $7,980 |
Up to $11,970 |
|
4.65% |
$11,971 to $23,930 |
$15,961 to $31,910 |
$7,981 to $15,960 |
$11,971 to $23,930 |
|
6.27% |
$23,931 to $263,480 |
$31,911 to $351,310 |
$15,961 to $175,660 |
$23,931 to $263,480 |
|
7.65% |
Over $263,480 |
Over $351,310 |
Over $175,660 |
Over $263,480 |
Data source: Wisconsin Department of Revenue.
Wyoming
Wyoming does not tax personal income or capital gains.
States play a major role in capital gains taxes
The lion's share of taxes, including personal income and capital gains taxes, go to the federal government. But each taxpayer's state also determines how much they owe on their capital gains.
It's important for taxpayers to know the capital gains tax brackets and exclusions in their respective states so they pay the correct amount. If you have investment income or you're planning to sell a capital asset, make sure you understand your state's tax code.
Outside experts weigh in
To learn more about capital gains taxes and how they affect markets, we asked numerous outside experts about the topic. Here's what they said:
Erik M. Jensen, the Coleman P. Burke Professor Emeritus of Law at Case Western Reserve University
Are there signs that capital gains taxes will be increased to balance the federal debt incurred by issuing stimulus payments?
Before there were stimulus checks, candidate Joe Biden expressed support for eliminating (1) the capital gain preference for higher-income people (so that capital gains would be taxed at the same rates as ordinary income for taxpayers with more than $1 million in income) and (2) the fair-market-basis rule that applies to property transferred at death.
(The latter is often referred to as the step-up-in-basis rule—although it can work to step-down basis as well -- in that any appreciation in the value of property transferred at death permanently disappears from the income-tax base.)
President Biden is expected to include those proposals in a package to be announced next week. He can’t make these changes on his own, however, and I’m not very good at predicting what Congress will do. With both the House and Senate closely divided, congressional approval might be iffy. I’m pretty sure Republicans in Congress would unanimously disapprove of these changes, and I’m skeptical that Democrats would all approve.
(The changes would in form directly affect only the well-to-do, but there is always the possibility -- maybe even the likelihood -- of spillover effects on lower-income persons.)
If the government expresses interest in raising capital gains taxes, could we see a stock sell-off in response? How might that affect the greater economy?
I have little doubt that there would be a sell-off in anticipation of a rate increase, particularly if the rate increase is coupled with elimination of the step-up-in-basis rule (which has provided an incentive to hold on to appreciated property longer than might otherwise be economically desirable).
(I’m assuming that any rate increases won’t be retroactive and that taxpayers will have time to sell assets while lower rates remain in effect.)
I’m not an economist, and I don’t have a reasoned opinion about the effects on the economy. However, one interesting point is that, if a sell-off occurs, tax revenues might actually go up in the short run, while the lower rates remain in effect. More sales would mean that what would otherwise have been unrealized (and therefore currently untaxed) appreciation would become realized (and therefore taxable) appreciation.
When higher rates then go into effect, one would anticipate fewer sales of capital assets. Unsold appreciated assets don’t generate income-tax revenue, and higher rates therefore don’t necessarily mean higher tax revenues.
Do you foresee the elimination of 0% capital gains tax rates? How many people might be affected by this, and how might that affect long-term participation in the markets?
If the president really supports an increase in the capital gains rate only for higher-income persons, the 0% rate should remain.
(In addition, the 100% exclusion for gain on the sale of qualified small business stock under section 1202 -- which has the effect of a 0% rate on such gain, even for high-income taxpayers -- doesn’t seem to be on the chopping block. And a 0% rate always applies to appreciation that isn’t realized -- i.e., if the taxpayer doesn’t sell the appreciated asset.)
I’m not sure how many taxpayers benefit from the 0% rate. Direct ownership of stock by individuals is concentrated among higher-income people. The stock market can affect the value of lower-income peoples’ retirement funds, of course, but those funds would generally not be taxable entities.
Jeffrey S. Jones, PhD, CFA®, CFP®, CPA (Inactive), Department Head, Finance and General Business Department, Missouri State University
Are there signs that capital gains taxes will be increased to balance the federal debt incurred by issuing stimulus payments?
I think potentially all forms of taxation are currently on the table, particularly to help offset the cost of the recent stimulus efforts during the COVID-19 pandemic.
It seems, however, that the Biden administration would most likely attempt to raise federal capital gains tax rates for only higher income earners.
If the government expresses interest in raising capital gains taxes, could we see a stock sell-off in response? How might that affect the greater economy?
History has shown us that while there can be a (mild) stock sell-off in response to anticipated higher future tax rates for capital gains, the sell-off is not as big as one might expect. This article has some nice data to illustrate this point.
The fact that such a large portion of the US equity is held by institutional investors (many of which are exempt from capital gains tax) helps mitigate this effect. Additionally, even if there is a sell-off, it tends to be short-lived.
I would expect any impact on the economy to be minimal.
Do you foresee the elimination of 0% capital gains tax rates? How many people might be affected by this, and how might that affect long-term participation in the markets?
I do not foresee the elimination of the 0% capital gains rate for lower-income earners.
Any interest by the Biden administration to raise capital gains tax rates seems to be targeted at the upper-income earners.
Jeffrey H. Kahn, Harry M. Walborsky Professor & Associate Dean for Business Law Programs, Florida State University College of Law
If Washington puts state capital gains taxes in place, might that pave the way for other states to do the same?
I do not think that the addition of a capital gains tax in the state of Washington would have much of a bearing on whether other states decide to impose one. The other considerations (political, financial, etc..) on whether to impose a state-level capital gains tax are likely more important.
For example, a capital gains tax on top of a higher federal tax might lead some to flee the state or at least make it less desirable to move there. We have seen a general trend of people moving from high tax states to low tax states and state governments are certainly aware of this.
I believe the pandemic has sped up the remote worker movement which allows people to be even more mobile and so tax rates may play an even larger role in residency decisions.
If the government expresses interest in raising capital gains taxes, could we see a stock sell-off in response? How might that affect the greater economy?
I believe a sell-off is certainty, especially if the increase is paired with the repeal of section 1014 which provides for a step-up basis at death.
The loss of value in the market will impact pension and retirement funds and make investments less attractive. It is unclear whether an increase will actually raise significantly more revenue so the trade-off does not appear to be worth it.
Do you foresee the elimination of 0% capital gains tax rates? How many people might be affected by this, and how might that affect long-term participation in the markets?
I do not foresee an elimination of the zero percent rate, but if it occurs it is unlikely to have a significant effect on the market.
