Mississippi does not tax capital gains at a special rate. A gain from stocks, a business or real estate is reported on the income tax return with your other income, and the whole of your taxable income is taxed on one graduated schedule that has a 0% first slice and a single positive rate above it. That rate is in the middle of a scheduled phase-down, so the year you realize a gain matters.
This guide uses the Mississippi Department of Revenue's tax rates page, its 2025 individual income tax instructions (Form 80-100, revised 12/25), its individual income tax FAQs and two IRS pages, all read on 3 November 2026. We did not read the Mississippi Code itself, so every rule below is stated as the Department states it.
The Department's tax rates page says Mississippi has a graduated tax rate and no tax schedule for income taxes: 0% on the first $10,000 of taxable income, with the excess over $10,000 taxed at a flat rate that depends on the year. The page gives 4.4% for tax year 2025, 4% for tax year 2026 and 3.75% for tax year 2027.
The instructions explain the law behind this. House Bill 1, effective July 1, 2025, sets the rate on the excess over $10,000 at 3.75% for 2027, 3.5% for 2028 and 3.25% for 2029, and a rate of 3% for 2030 and all years after, except as otherwise provided. For 2031 and later years the bill adds a possible further reduction if the Working Cash-Stabilization Reserve Fund is fully funded and revenue exceeds appropriations by set margins. Whether any of that happens is not known today, so treat 3% as a scheduled floor, not a promise.
The $10,000 is a slice of taxable income, that is, income after the exemptions and deductions on the Mississippi return. A large gain therefore does not by itself use up the zero bracket unless your other taxable income is below $10,000. The Department also says that on a combined return (both spouses work), each spouse can calculate their tax liability separately and add the results.
The instructions for the capital gain or loss line say Mississippi generally follows IRS rules concerning computation of capital gains and losses, and that Mississippi does not have different tax rates for capital gains: all income is taxed at the same rate. Federal Schedule D must be attached to your return if applicable. If the amount you enter differs from the federal amount, a reconciliation should be attached, or you enter the federal amount and put the adjustment on Form 80-108, Schedule N.
The practical result is that the holding period does not change the Mississippi rate. IRS Topic 409 says that you generally have a long-term gain if you hold the asset more than one year and that a lower tax rate may apply to a net capital gain than to ordinary income, but that is the federal system. Mississippi's pages that we read apply the same schedule to a short-term and a long-term gain.
The Department's FAQ says long-term capital gains are considered taxable income, with two exceptions: Mississippi exempts the gain from the sale of authorized shares in financial institutions domiciled in Mississippi, and it exempts gains on interests in domestic corporations, domestic limited partnerships and domestic limited liability companies that have been held for more than one year. The FAQ adds that any gain that would otherwise be excluded is first applied against, and reduced by, any losses incurred in the year of the gain or within two years before or after it. The instructions say the same for gains from sales of ownership interests, citing Miss. Code Ann. Section 27-7-9(f)(10).
These are narrow rules for ownership interests, and the wording is the Department's summary, not the statute, which we did not read. If you are selling a business or a stake in an entity, check the exact conditions with the Department or a preparer before relying on the exemption.
This table is our arithmetic (gain times the rate), not an official calculation. It shows the tax a gain adds when it sits entirely on top of other taxable income that is already above $10,000, ignoring credits and adjustments, rounded to the nearest dollar.
| Capital gain | Added tax at 4.4% (2025) | Added tax at 4% (2026) | Added tax at 3.75% (2027) |
|---|---|---|---|
| $10,000 | $440 | $400 | $375 |
| $50,000 | $2,200 | $2,000 | $1,875 |
| $100,000 | $4,400 | $4,000 | $3,750 |
| $500,000 | $22,000 | $20,000 | $18,750 |
Two worked examples (ours), both for 2026 and both stated in taxable income so that no exemption or deduction amounts are assumed. First, a filer has $40,000 of taxable income before a $50,000 gain. Tax before the gain is ($40,000 minus $10,000) times 4%, or $1,200; tax with the gain on $90,000 is $80,000 times 4%, or $3,200. The gain adds $2,000. Second, a filer has $4,000 of taxable income before a $20,000 gain. Tax before the gain is $0; with the gain, taxable income is $24,000 and tax is $14,000 times 4%, or $560, so the gain adds $560 (an effective 2.8% of the gain) because part of it fell in the zero bracket. Real returns can differ because of credits, exemptions and other items.
The instructions say capital loss deductions are subject to the same limitations as federal, and the FAQ says Mississippi generally follows the federal rules governing capital losses and that capital losses are limited to $3,000 per year. We did not find a Mississippi-specific carryforward rule in the pages we read, so for carryovers follow the federal return and ask the Department if the amount is large. Net operating losses are a separate topic with their own schedule, Form 80-155.
A Mississippi resident who earns income in another state includes all income on the resident form and may be entitled to a credit against Mississippi tax for income taxes paid to the other state. The Department says the credit is for the other state's actual tax liability, not its withholding, and a copy of the other state's return is needed.
Nonresidents and part-year residents file the Non-Resident or Part-Year Resident return, Form 80-205. Only Mississippi income is taxable for a nonresident, but total income must be declared so exemptions and deductions can be prorated, and the ratio of Mississippi income to total income cannot exceed 100%. A part-year resident is taxed only on income earned while a resident of Mississippi and prorates deductions and exemptions. In the passages we read, the Department does not say how a nonresident should treat a gain on intangible assets such as stock, so we do not state a rule for that; ask the Department or a preparer. Calendar year returns are due no later than April 15.
We found no separate Mississippi home sale rule in the pages we read. IRS Topic 701 says you may qualify to exclude up to $250,000 of the gain on the sale of your main home from your income, or up to $500,000 if you file a joint return with your spouse. Because the Department says Mississippi generally follows IRS rules for computing capital gains, our reading is that only the gain above the federal exclusion would be taxed by Mississippi, but the Department does not say this about home sales in so many words, so confirm with it if the amount is large. For the federal test, see our home sale capital gains guide.