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% 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.

Selling Your Home in California — the $250,000 / $500,000 Exclusion

Most people searching for California capital gains tax are selling a house, and the single biggest number in that calculation is the one flat-rate calculators leave out. Under IRC §121 (IRS Topic 701), you can exclude $250,000 of gain if single and $500,000 if married filing jointly when you have owned the home and used it as your main home for at least two of the five years before the sale. California conforms to §121, so the excluded slice escapes the FTB's 1–13.3% ordinary rate as well as the federal 0/15/20% — and because it never enters your modified AGI, it does not attract the 3.8% NIIT either. A married couple in Los Angeles with a $650,000 gain is therefore taxed on $150,000, not $650,000, which at a 9.3% state and 15% federal rate is roughly a $180,000 swing. The calculator above now asks whether the long-term gain came from your main home and applies the exclusion before rating anything. Two limits worth knowing: the exclusion covers gain, not sale price, and you generally cannot claim it more than once in a two-year period. Updated 2026-09-08.

California Long-Term vs Short-Term Capital Gains Rate

California applies one rate ladder to both: there is no preferential long-term capital gains rate at the state level, so a gain held ten years is taxed exactly like a gain held ten weeks. The state ladder runs through nine ordinary-income steps — 1%, 2%, 4%, 6%, 8%, 9.3%, 10.3%, 11.3% and 12.3% — with an extra 1% Mental Health Services Tax on taxable income above $1 million, giving the 13.3% top rate. The only thing holding period changes is the federal side of your bill: long-term gains get the 0/15/20% federal rates, while short-term gains are taxed at federal ordinary rates up to 37%. That is why the same $100,000 gain can cost roughly 9 percentage points more if you sell before the 12-month mark. Bracket thresholds are inflation-adjusted every year — confirm the current-year figures on the California FTB capital gains page before filing.

Last updated August 2026. Sources: California FTB, IRS §1411, IRS Publication 550.