Capital Gains Tax Brackets 2026: 0%/15%/20% Thresholds

Unlike ordinary income, which is taxed under the seven-bracket schedule (10% to 37%), long-term capital gains get their own, simpler rate structure: 0%, 15%, or 20%. Which rate applies depends on your total taxable income — including the gain itself — for the year. These thresholds are adjusted for inflation annually by the IRS, and the 2026 figures (from Revenue Procedure 2025-32) are higher than 2025's.

This guide covers the exact 2026 bracket thresholds for every filing status, how capital gains "stack" on top of your ordinary income to determine which rate applies, the difference between short-term and long-term treatment, and the 3.8% Net Investment Income Tax (NIIT) that applies on top of the federal capital gains rate for higher earners.

How the 2026 Capital Gains Tax Brackets Work

Long-term capital gains brackets are not a separate, standalone calculation — they "stack" on top of your ordinary taxable income (wages, interest, business income, etc.) to determine which capital gains rate applies. The IRS effectively fills your income up from $0 with ordinary income first, then layers your long-term capital gains and qualified dividends on top of that stack.

This matters because it means the rate on your capital gains depends on your total taxable income for the year, not just the size of the gain. A retiree with $30,000 of ordinary income and a $40,000 long-term gain will have most of that gain taxed at 0%, because their combined income stays under the $49,450 single-filer 0% threshold. A high earner with $400,000 of wage income and a $200,000 long-term gain will have the entire gain taxed at 20%, because their stacked income is already well above the top breakpoint before the gain is even added.

The three federal long-term capital gains rates for 2026 remain 0%, 15%, and 20% — these percentages themselves have not changed. What changes every year is the income threshold at which each rate kicks in, because the IRS adjusts these breakpoints for inflation under Internal Revenue Code Section 1(h) and 1(j)(5).

2026 Long-Term Capital Gains Tax Brackets by Filing Status

The table below shows the official 2026 thresholds from IRS Revenue Procedure 2025-32. The "0% up to" column shows the maximum zero-rate amount; the "15% up to" column shows where the 20% rate begins.

Compare this to 2025: the single-filer 0% threshold was $48,350 and the 15%/20% breakpoint was $533,400. The 2026 figures represent a roughly 2.3% inflation adjustment — modest but real, and it's worth re-checking every filing season since 2025 numbers are frequently reused by mistake in outdated articles.

Worked Example: Gain Taxed Entirely at 15%

A single filer has $90,000 of ordinary taxable income (after deductions) and sells stock held for three years, realizing a $30,000 long-term gain. Stacked total income is $120,000 — above the $49,450 zero-rate threshold but well below the $545,500 breakpoint. The entire $30,000 gain is taxed at 15%: $4,500 in federal capital gains tax.

Worked Example: Gain Split Across the 15% and 20% Brackets

A single filer has $520,000 of ordinary taxable income and a $80,000 long-term gain, for a stacked total of $600,000. The $545,500 breakpoint falls inside the gain: $25,500 of the gain ($545,500 minus $520,000) is taxed at 15% = $3,825. The remaining $54,500 is taxed at 20% = $10,900. Total federal capital gains tax: $14,725 — an effective rate of about 18.4% on the $80,000 gain.

Short-Term vs Long-Term Capital Gains

The 0%/15%/20% brackets only apply to long-term capital gains — assets held for more than one year before sale. If you hold an asset for one year or less, any profit is a short-term capital gain, taxed as ordinary income at your regular marginal tax rate under the standard seven-bracket schedule (10%, 12%, 22%, 24%, 32%, 35%, or 37% for 2026).

For 2026, the top 37% ordinary rate applies to taxable income above $640,600 (single) or $768,700 (married filing jointly), per the same IRS Revenue Procedure 2025-32. This means a high-income investor who sells an asset just one day before the one-year mark can pay more than double the tax rate compared to waiting a single extra day to cross into long-term treatment — one of the simplest and most impactful tax-planning levers available to investors.

The holding period clock starts the day after you acquire the asset and includes the day you sell it. For inherited assets, the IRS automatically treats the holding period as long-term regardless of how long the beneficiary actually held the asset, because of the stepped-up basis rules.

The Net Investment Income Tax (NIIT): The Hidden 3.8% Surtax

High earners face an additional layer of tax on capital gains beyond the federal 0/15/20% brackets: the 3.8% Net Investment Income Tax (NIIT), authorized under Internal Revenue Code Section 1411. NIIT applies to the lesser of (a) your net investment income for the year, or (b) the amount by which your Modified Adjusted Gross Income (MAGI) exceeds the threshold for your filing status.

Unlike the capital gains brackets, these NIIT thresholds are not adjusted for inflation — they have remained fixed since the tax was introduced in 2013 under the Affordable Care Act. That means more taxpayers become subject to NIIT every year simply because wages and asset values rise with inflation while the threshold stays flat.

Continuing the worked example above: the single filer with $600,000 of stacked income (MAGI $600,000) is $400,000 over the $200,000 NIIT threshold — far more than the $80,000 gain itself, so the full $80,000 gain is subject to NIIT. That adds $3,040 (3.8% × $80,000) on top of the $14,725 in bracket-based capital gains tax, bringing the total federal tax on that single gain to $17,765 — an effective federal rate of roughly 22.2%, before any state tax is added.

Where State Capital Gains Tax Fits In

Everything above covers federal tax only. Most US states add their own capital gains tax on top — either as a flat rate, a graduated income tax rate, or (in nine states) 0%, since they have no state income tax at all. California's combined top rate (20% federal + 13.3% state + 3.8% NIIT) can exceed 37% on a single large gain. See our Capital Gains Tax by State 2026 guide for the full 50-state breakdown, including which states tax short-term and long-term gains identically.