Long-Term Capital Gains Tax Rates (2026): There Are Four, Not Three
Long-term gains are taxed at 0%, 15% or 20%. But the 3.8% net investment income tax begins at $200,000 for a single filer and the 20% rate does not begin until $545,500, so the band in between is taxed at 18.8%.
Rate tables show three numbers. A single filer can actually face four, and the extra one covers a wider stretch of income than either of the two rates on either side of it.
What are the long-term capital gains rates for 2026?
0%, 15% and 20%, decided by your taxable income. For a single filer the 0% band ends at $49,450 and the 20% band starts above $545,500.
Everything between those two figures is taxed at 15% before any surtax. That is a very wide band, which is why 15% is the rate most people who sell an appreciated asset actually pay.
IRS Revenue Procedure 2025-32, maximum zero rate amounts for tax years beginning in 2026, read 28 August 2026.
Where does the fourth rate come from?
From a surtax with its own threshold that nobody indexed.
The net investment income tax adds 3.8% once modified adjusted gross income passes $200,000 for a single filer. The 20% capital gains rate does not arrive until $545,500 of taxable income. Between those points you are in the 15% band and paying the surtax, which is 18.8% combined.
Our calculation, combining the capital gains rates in IRS Revenue Procedure 2025-32 with the 3.8% net investment income tax. The two use different income measures: the capital gains bands are set on taxable income, the surtax on modified adjusted gross income.
The two thresholds are measured differently, so the crossover is not a single clean number. The direction is reliable though: the surtax threshold is far lower than the 20% threshold, so a large share of people who think they are in the 15% band are paying 18.8%.
The surtax thresholds have not moved since 2013 and are not indexed. Every year of inflation therefore pulls more people over them without anyone's real income changing, which is the opposite of how the 0% and 15% ceilings behave.
How much can you make and pay no capital gains tax?
About $65,550 of gross income for a single filer, which is meaningfully more than the $49,450 ceiling suggests.
The ceiling applies to taxable income, and the 2026 standard deduction of $16,100 comes off before that test. A single filer whose income is entirely long-term gains can therefore realise $49,450 plus $16,100 and still land at a 0% rate. For a joint filer the equivalent figure is $98,900 plus a $32,200 standard deduction.
This is the mechanism behind deliberately realising gains in a low-income year. It is not a loophole, it is the bracket working as written, and it is only available to people whose total taxable income stays under the ceiling.
How do long-term gains compare with ordinary income?
The top rate on a long-term gain is 23.8%. The top rate on the same money earned as salary is 40.8%.
Our calculation: 20% top capital gains rate plus the 3.8% net investment income tax, against the 37% top ordinary rate plus the same surtax. Both figures are federal only and exclude state tax.
A 17-point spread is the whole reason the holding period matters. Sell at eleven months and the gain is short-term, taxed as ordinary income, and can reach 40.8% at the top. Sell after twelve months and the ceiling is 23.8%.
State tax sits on top of all of this and most states tax capital gains as ordinary income, which can add several points more depending on where you live. Our state-by-state guide to take-home pay covers how far apart the states are on ordinary income.
Canada does this completely differently
There is no separate rate schedule for capital gains in Canada at all.
Instead, half the gain is added to ordinary income and taxed at your normal marginal rate. There is no holding period, no 0% band and no equivalent of the net investment income tax. A proposal to raise that inclusion fraction was announced and then cancelled, which the Canadian guide to the inclusion rate walks through.
Frequently asked questions
What are the long-term capital gains tax rates for 2026?
0%, 15% and 20%, set by taxable income rather than by a separate schedule. For a single filer the 0% rate runs to $49,450 of taxable income and the 20% rate begins above $545,500. A separate 3.8% net investment income tax can apply on top of any of them.
What is the 0% capital gains bracket for 2026?
$49,450 of taxable income for single and married filing separately, $66,200 for head of household, and $98,900 for married filing jointly. Below those figures, qualifying long-term gains are taxed at nothing, which is the largest single break in the capital gains rules.
How much can you make and pay no capital gains tax?
A single filer taking the standard deduction can have about $65,550 of gross income made up of long-term gains and still pay 0%, because the $16,100 standard deduction comes off before the $49,450 ceiling is tested. The ceiling applies to taxable income, not gross income.
What is the net investment income tax?
A 3.8% tax on investment income once modified adjusted gross income passes $200,000 for single and head of household filers, $250,000 for joint filers, or $125,000 for married filing separately. It has applied since 2013 and its thresholds are not adjusted for inflation.
Is the top capital gains rate 20% or 23.8%?
23.8% in practice for most people who reach the 20% bracket, because the net investment income tax threshold sits far below the 20% threshold. The 20% figure quoted in rate tables excludes the 3.8% surtax, which by that income level almost always applies.
What is the difference between short-term and long-term capital gains?
Holding period. An asset held more than one year produces a long-term gain taxed at 0%, 15% or 20%. An asset held a year or less produces a short-term gain taxed as ordinary income, which reaches 37% at the top rather than 20%.
Are capital gains added to your income for tax purposes?
Yes, they are included in taxable income, which is what determines both your ordinary bracket and which capital gains rate applies. A large gain can therefore push you into a higher capital gains band and past the net investment income tax threshold in the same year.
Do capital gains thresholds change every year?
The 0% and 15% ceilings are adjusted annually for inflation, so they moved for 2026. The 3.8% net investment income tax thresholds do not adjust, which means more taxpayers cross them each year without their real income having changed.
Researching and writing about Canadian personal finance since 2026.
Last reviewed August 2026 · How we research
“Long-Term Capital Gains Tax Rates (2026): There Are Four, Not Three.” Vault Nerd, https://www.vaultnerd.com/learn/long-term-capital-gains-tax-rates, updated August 2026.
- IRS Revenue Procedure 2025-32, inflation adjustments for tax year 2026: maximum zero rate amounts, maximum 15 percent rate amounts, standard deduction and ordinary rate schedules
- IRS, Net Investment Income Tax: 3.8% rate and modified adjusted gross income thresholds of $200,000, $250,000 and $125,000, read 28 August 2026