Does New Jersey have a special capital gains rate?

No. New Jersey taxes capital gains as ordinary income under its regular graduated brackets, from 1.4% up to 10.75%. There is no reduced rate for long-term gains at the state level, unlike federal treatment.

How are long-term capital gains taxed federally?

Long-term gains on assets held more than one year are taxed at preferential federal rates of 0%, 15%, or 20% depending on your taxable income. Short-term gains on assets held one year or less are taxed as ordinary federal income.

What is the difference between short-term and long-term gains?

Holding period determines the category. Assets held more than one year qualify for long-term treatment and lower federal rates. Assets held one year or less are short-term and taxed at higher ordinary rates federally; New Jersey taxes both the same way.

Is there a federal surtax on investment income?

Yes. The 3.8% Net Investment Income Tax can apply to high earners above income thresholds. This calculator focuses on regular federal and New Jersey rates and does not add the NIIT, so high earners may owe slightly more.

How accurate is this calculator?

It provides a close estimate using current federal long-term brackets and New Jersey's ordinary-income treatment. It does not model the 3.8% NIIT, state credits, or AMT, so confirm with a tax professional for large gains.

New Jersey Capital Gains Tax Calculator

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When you sell an investment at a profit in New Jersey, you face two layers of tax. Federally, long-term gains get preferential 0% / 15% / 20% rates while short-term gains are taxed as ordinary income. New Jersey, however, taxes all capital gains as ordinary income under its graduated brackets. This calculator combines both.

How it works

Capital gains tax for a New Jersey resident is computed in three steps:

Classify the gain. Assets held more than one year are long-term; one year or less are short-term. This only matters federally — New Jersey taxes both the same.
Federal tax. Long-term gains use the federal 0% / 15% / 20% brackets based on your total taxable income. Short-term gains are stacked on your ordinary income and taxed at your federal marginal rate (approximated here using the federal ordinary brackets).
New Jersey tax. The full gain is added to your other income and taxed under New Jersey’s graduated brackets (1.4% to 10.75%). In formula form the gain is taxed at the New Jersey marginal rate that applies on top of your other income.

Tips and example

For a $20,000 long-term gain with $80,000 of other taxable income: the federal long-term rate is 15%, so federal tax is $3,000. New Jersey taxes the $20,000 as ordinary income at roughly the 6.37% marginal rate, adding about $1,274. The combined tax is around $4,274.

Holding an asset past the one-year mark can cut your federal rate dramatically, but it does not change your New Jersey bill since the state ignores the holding period. Large gains may also trigger the federal 3.8% net investment income tax, which this tool does not include.