Does California tax capital gains at a lower rate?

No. California has no special capital-gains rate — gains are taxed as ordinary income at the state's regular 1% to 12.3% brackets (13.3% with the millionaire surcharge). This applies whether the gain is short-term or long-term, which is why California's combined rate can be among the nation's highest.

What are the 2024 federal long-term capital gains rates?

Federal long-term gains (assets held over one year) are taxed at 0%, 15%, or 20% depending on taxable income. For single filers in 2024, 0% applies up to $47,025, 15% from there to $518,900, and 20% above that. Short-term gains are taxed at ordinary federal rates instead.

How does the holding period change my tax?

If you hold an asset more than one year, the gain is long-term and qualifies for preferential federal rates (0/15/20%). One year or less makes it short-term, taxed at your ordinary federal income-tax bracket. Either way, California taxes the gain at full ordinary rates.

Is the 3.8% Net Investment Income Tax included?

This calculator focuses on the federal capital-gains rate plus California income tax. High earners with modified AGI above $200,000 (single) or $250,000 (joint) may also owe the 3.8% federal Net Investment Income Tax, which this estimate does not add. Factor it in separately if it applies.

Why is California's combined capital-gains rate so high?

Because California stacks its full ordinary-income rate (up to 13.3%) on top of the federal rate. A top earner could pay 20% federal plus 13.3% California, before the 3.8% NIIT — among the highest capital-gains burdens in the United States.

California Capital Gains Tax Calculator

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California is one of the harshest states for investors: it has no preferential capital-gains rate, so your gains are taxed as ordinary income on top of the federal rate. This calculator combines the federal treatment — preferential for long-term, ordinary for short-term — with California’s full income tax.

How it works

The federal and California layers are computed separately and added:

Federal (long-term):  0% / 15% / 20% based on total taxable income
Federal (short-term): your ordinary federal bracket
California:           full ordinary-income brackets (1%–12.3%) on the gain
combined tax = federal capital-gains tax + California tax on the gain

Federal long-term rates depend on where your total taxable income (other income plus the gain) lands across the 0/15/20 percent breakpoints. California ignores the holding period entirely and taxes the gain as ordinary income at your marginal state rate.

Example

A single filer with 100,000 dollars of other income and a 50,000-dollar long-term gain pays 15 percent federally on the gain (7,500 dollars) and California’s ordinary rate of about 9.3 percent (4,650 dollars), for a combined 12,150 dollars — roughly 24.3 percent of the gain.

Notes

This estimates the federal capital-gains tax plus California income tax on the gain. It does not add the 3.8 percent federal Net Investment Income Tax that may apply to higher earners, nor state alternative minimum tax. The federal 0/15/20 breakpoints are based on total taxable income. Confirm against IRS Schedule D and FTB Form 540 Schedule D.