California Capital Gains Tax 2026 State Rate Calculator
California capital gains tax 2026 is taxed as ordinary income at 1-13.3% — plus federal long-term rates 0/15/20% and the 3.8% NIIT for high earners. CA has no preferential rate, making it among the highest-taxed states for investment gains.
| Federal long-term rate | — |
| Federal capital gains tax | — |
| CA state rate (ordinary income) | — |
| California state tax on gain | — |
| NIIT 3.8% (if MAGI > threshold) | — |
| Short-term tax (federal + CA) | — |
| Total tax on gain | — |
California capital gains tax 2026 is taxed as ordinary income at 1-13.3% — plus federal long-term rates 0/15/20% and the 3.8% Net Investment Income Tax (NIIT) for high earners. Unlike federal law, CA does not give preferential treatment to long-term gains, making it the highest-tax state for investors.
How California Taxes Capital Gains in 2026
The California Franchise Tax Board (FTB) treats both short-term and long-term capital gains as ordinary income. Brackets run from 1% (under $10,756 single) up to 13.3% (over $1M single, including the 1% Mental Health Services Tax). High earners face 12.3% + 1% surcharge = 13.3% top rate — the highest state capital gains rate in the US. There is no separate long-term rate at the state level.
Federal Long-Term Rates Stack on Top
Federal long-term capital gains use the three-tier system: 0% below $47,025 single / $94,050 MFJ; 15% middle bracket; 20% above $518,900 single / $583,750 MFJ. Short-term gains (held ≤1 year) are taxed at federal ordinary rates up to 37%. NIIT 3.8% applies on top when MAGI exceeds $200K single / $250K MFJ per IRC §1411.
Total Effective Rate Examples
A California single filer with $250K income + $100K long-term gain pays roughly: 15% federal + 9.3% CA + 3.8% NIIT = ~28.1% combined. At $1M+ income with $500K gain: 20% federal + 13.3% CA + 3.8% NIIT = ~37.1% combined — among the highest investment tax rates in the developed world. Plan exits in low-income years or relocate before realizing massive gains.
Strategies to Reduce California Cap Gains
(1) Tax-loss harvesting — offset gains with losses, $3K/year ordinary income deduction. (2) Qualified Opportunity Zones — defer and reduce gains via QOZ investment, though CA partially decoupled in 2019. (3) Charitable Remainder Trust (CRT) — defer and spread tax over years. (4) Move before sale — establish residency in NV/TX/WA/FL before closing. CA aggressively audits residency changes — keep 183-day records, change driver's license, voter registration, and move bank accounts.
Last updated May 2026. Sources: California FTB, IRS §1411, IRS Publication 550.