Capital Gains Tax Rates 2026: 0%, 15%, 20%, and NIIT

Capital gains tax rates for 2026 remain at 0%, 15%, and 20% for long-term gains — the same three-rate structure that has applied since 2013 — but the income thresholds separating those brackets increased by roughly 2.3% due to annual inflation adjustments announced by the IRS in Revenue Procedure 2025-32. For 2026, a married couple filing jointly pays 0% federal tax on long-term capital gains up to $98,900 in total taxable income, 15% from there up to $613,700, and 20% above that. Single filers hit the 15% bracket at $49,451 and the 20% bracket at $545,501. Short-term gains, meaning gains on assets held one year or less, are taxed as ordinary income at rates from 10% to 37% regardless of income level. High earners also pay an additional 3.8% net investment income tax on top of these rates, which pushes the effective rate on long-term gains in the top bracket to 23.8% — a number that matters more than the headline 20% for anyone doing serious portfolio planning.

For 2026, most net long-term capital gain remains subject to the 0%, 15%, or 20% federal rate structure. The useful planning question is how much taxable income already fills the lower bands before a gain is added. The $98,900 married-filing-jointly threshold is not a separate allowance for gains; ordinary taxable income and preferential-rate income share that space.

What Are the Long-Term Capital Gains Rates for 2026?

The full bracket structure for tax year 2026, for returns filed in early 2027:

Single filers:

0% on taxable income up to $49,450
15% from $49,451 to $545,500
20% above $545,500

Married filing jointly:

0% up to $98,900
15% from $98,901 to $613,700
20% above $613,700

Head of household:

0% up to $66,200
15% from $66,201 to $579,600
20% above $579,600

Married filing separately:

0% up to $49,450
15% from $49,451 to $306,850
20% above $306,850

Two things about these numbers are worth pausing on. First, the brackets apply to taxable income — meaning adjusted gross income minus either the standard deduction or itemized deductions. For a married couple taking the 2026 standard deduction of $32,200, that means gross income up to about $131,100 can still fall inside the 0% long-term capital gains bracket. That's roughly the median household income of a two-earner family in a coastal metro. The 0% bracket is not as rarefied as it sounds.

Second, long-term gains stack on top of ordinary income when determining which bracket they fall into, but they don't push ordinary income into a higher bracket. Think of it as two separate staircases running side by side. Your wages climb the ordinary-income staircase. Your long-term gains start at whatever step your wages ended on, and climb the capital-gains staircase from there. This ordering is what makes the 0% bracket usable — if your ordinary income alone falls below the 0% threshold, you have room to realize gains tax-free up to the threshold.

How Much Can You Realize in the 0% Bracket?

The 0% bracket is the most underused feature of the federal tax code. Here's why it matters.

Worked example #1. A married couple in their early 60s has retired early. Their wage income is zero. They take $20,000 a year from their taxable brokerage dividends and $15,000 from a part-time consulting gig. Total AGI: $35,000. After the $32,200 standard deduction, taxable income before any gains is $2,800.

They own an index fund position worth $400,000 with an adjusted cost basis of $150,000. The embedded long-term gain is $250,000. If they sold the entire position in one year, roughly $96,100 of that gain would fall inside the 0% bracket ($98,900 − $2,800 of existing taxable income), and the remaining $153,900 would be taxed at 15% for a tax bill of about $23,085. Not a great outcome.

They could instead realize only enough gain to use the available 0% room this year and recalculate in each future year. The current $250,000 embedded gain does not create ten years of $96,000 gains, and future room cannot be assumed: income, deductions, portfolio value, filing status, and federal thresholds will change. A gain actually taxed at 0% receives a new basis after repurchase, but later appreciation can still be taxable.

This planning technique is usually called tax-gain harvesting. Realizing only the gain that fits within verified 0% federal room can raise the basis of the shares repurchased. State tax and income-related thresholds may still apply, and the available room must be recalculated every year. For a detailed mechanical walkthrough, see what is tax-loss harvesting.

How Do Capital Gains Interact With Ordinary Income?

The stacking rule matters whenever a household has significant wages and significant gains. Gains get taxed at the rate of whatever bracket they fall into after ordinary income fills up the lower brackets.

Worked example #2. A married couple has $120,000 of wage income and realizes $60,000 of long-term capital gains during the year. Their total 2026 taxable income after the $32,200 standard deduction is $147,800. The gains sit on top of ordinary income, so they occupy the range from $87,800 to $147,800 of taxable income.

The 15% long-term bracket for married couples starts at $98,901. So $11,101 of their gains ($98,900 − $87,800 + $1) falls in the 0% bracket, and the remaining $48,899 falls in the 15% bracket. Federal tax on the gains: $48,899 × 15% = $7,335. Average rate on the $60,000 of gains: 12.2%, not 15%.

Most casual "capital gains calculators" miss the bracket-splitting detail and quote a flat 15%. Over a lifetime of gains, the difference between those two assumptions runs into five figures. This is one of several reasons that automated tools that evaluate every tax lot — not just headline gain or loss — produce materially better outcomes than manual spreadsheet planning.

What Counts as a Short-Term Capital Gain and Why It Matters

Short-term capital gains are profits on assets held for one year or less. They are not eligible for the preferential long-term rates. Instead they are taxed as ordinary income, which for 2026 means rates ranging from 10% to 37% depending on total taxable income.

The gap between short-term and long-term rates is the single largest reason that thoughtful tax lot selection matters. A high-income investor holding stock at a gain can face a 37% + 3.8% = 40.8% federal rate on a short-term sale versus a 20% + 3.8% = 23.8% rate on a long-term sale of the same stock. That's a 17-point spread, or roughly $170 of tax avoided per $1,000 of gain simply by holding the position a few extra days past the one-year mark.

This is also why holding period matters when deciding which lot to sell. A lot that is already long-term can carry a lower federal rate than one approaching the one-year mark, but basis and investment risk also matter. A default accounting method applies its own ordering rather than optimizing for the household's full tax picture. For the tradeoffs, see FIFO vs. specific identification of tax lots.

How Does the 3.8% NIIT Push the Top Rate to 23.8%?

For single filers with modified adjusted gross income above $200,000 — or married couples above $250,000 — an additional 3.8% net investment income tax applies to investment income, including long-term capital gains. The NIIT thresholds have not been adjusted for inflation since the tax took effect in 2013, which means a growing number of households cross them every year as wages and portfolios rise.

For a high-income investor in the top long-term bracket, the effective federal rate on long-term capital gains is therefore 20% + 3.8% = 23.8%. On a $500,000 realized gain, that's $119,000 in federal tax. A high-earning California resident adds another 13.3% state income tax (California doesn't give capital gains preferential treatment), pushing the combined rate past 37%.

The practical consequence: every dollar of harvested loss for a high-income investor is worth more than a flat "15%" or "20%" mental model suggests. A $10,000 harvested loss that offsets a $10,000 long-term gain saves $2,380 at the 23.8% combined rate, not $2,000. Over a decade of continuous harvesting on a large portfolio, that NIIT multiplier adds up to real money. The full analysis is in our net investment income tax NIIT 2026 explainer.

What About Collectibles, Crypto, and Qualified Small Business Stock?

The 0%, 15%, 20% structure applies to most long-term capital gains — stocks, bonds, ETFs, mutual funds, real estate held for investment, and most crypto. But a few asset categories have their own rules.

Collectibles, including physical gold, art, wine, coins, and similar items, are taxed at a maximum long-term rate of 28% regardless of which bracket the rest of your income falls in. This is worth knowing before you buy gold bullion as a "tax-efficient" inflation hedge — the long-term rate is actually higher than on a boring index fund.

Section 1202 qualified small business stock (QSBS) can receive a partial or full federal gain exclusion if the stock and taxpayer satisfy detailed requirements. The 2025 law changed the rules for qualifying stock acquired after July 4, 2025, including phased exclusions after three, four, and five years and higher issuer asset and per-issuer gain limits. Acquisition date matters, so use the current IRS Schedule D instructions and professional advice rather than applying a single headline limit.

Unrecaptured Section 1250 gain from the sale of depreciated real estate is taxed at a maximum of 25%. And cryptocurrency is taxed as property — short-term at ordinary rates, long-term at the standard 0/15/20% schedule — but the wash-sale rule has not yet been extended to crypto, which means crypto investors still have planning flexibility that stock investors lost decades ago.

When Should You Realize Gains Intentionally?

Most tax planning advice focuses on deferring gains. That's usually right — a dollar of tax paid in thirty years is worth less than a dollar of tax paid today. But three situations flip the logic and argue for realizing gains now:

First, when the realization falls inside the 0% bracket. Intentional gain realization may be worth considering, but the federal rate is only one input. State tax, Medicare premiums, Social Security taxation, credits, charitable plans, estate strategy, transaction costs, and the holding period can all change the answer.

Second, when harvested losses are available to offset the gain. Coordinating a gain with a loss may raise basis on one position while using a capital loss on another. It is an exchange of tax attributes, not a free elimination of tax: replacements can change exposure, the loss carryforward has value, and future sales can create new gains.

Third, when your bracket is unusually low this year. A gap between jobs, a sabbatical, a low-income business year, or early retirement before Social Security and required minimum distributions may create temporary bracket room. Quantify that room from a full tax projection before realizing gains.

Each of these situations requires knowing, with precision, what every lot in your portfolio looks like: cost basis, holding period, unrealized gain or loss, and where it fits in this year's tax picture. That visibility is what separates intentional tax planning from hoping for the best in April.

For the mechanics of how to choose which specific lot to sell when you have multiple positions, see our optimal tax lot selection piece, which walks through scenarios where the highest-cost lot is not the right choice. On the interaction between these brackets and the NIIT, see our net investment income tax NIIT 2026 explainer. For retirees specifically, the 0% bracket is a different game entirely — read our tax loss harvesting for retirees guide on bracket filling and matched pairs. And for the full picture on which lots to sell vs. hold, see FIFO vs specific identification.

The 2026 brackets become useful when combined with actual lots and a full income projection. Available 0% room, harvested losses, NIIT, and state tax can all affect a sale. Recalculate rather than assuming a flat rate or a universal strategy.

Apply the Rates to More Complex Situations

Large embedded gains require a sale plan rather than a flat-rate estimate. Start with buy-and-hold portfolios with embedded gains, then add state-specific planning with California concentrated stock. Investors expecting a business sale or already in upper brackets should use the separate guides for business owners and high-income investors.

Holding appreciated assets until death introduces a different set of assumptions. Review estate planning with tax-loss harvesting before treating a basis adjustment as part of the plan.

Put Losses, Carryforwards, and Dividends Into the Same Tax Picture

The rate table becomes useful only when current gains, harvested losses, and prior-year carryforwards are evaluated together. Start with capital-loss carryforwards explained and short-term versus long-term capital gains.

Dividend investors have additional timing questions. See tax-loss harvesting for dividend stocks, harvesting around dividend dates, and avoiding unnecessary income before dividend dates. The broader strategy is covered in maximizing tax efficiency with dividends, using carryforwards with dividends, tax planning for couples with gains and dividends, and the complete dividends-and-carryforwards guide.