States with no capital gains tax, and the federal tax that still applies
State tax
8 states have no income tax and so no tax on capital gains; the federal tax still applies, $15,000 on a $100,000 long-term gain for a single filer with $80,000 of other income.
- 8states with no income tax
- $15,000federal tax still due
State-Level Exemptions
The table below lists jurisdictions that impose no state income tax. This absence means capital gains face no additional state-level levy in these areas. Readers should consult the table to identify their specific location. Eight states currently operate under this framework. The federal obligation remains constant regardless of state residence. Local exemptions do not alter the federal calculation. The key figures above show the estimated federal liability for a standard scenario. This baseline applies uniformly across all states. Use the calculator to refine these estimates for your situation.
| State |
|---|
| Alaska |
| Florida |
| Nevada |
| New Hampshire |
| South Dakota |
| Tennessee |
| Texas |
| Wyoming |
Federal Obligations Remain
Federal tax rules apply nationwide. State exemptions do not reduce the federal burden. The key figures above illustrate the federal amount due on a typical long-term gain. This figure represents an estimate for the stated filing status and income level. It serves as a reference point for comparison. Actual liability depends on individual circumstances. The federal rate structure does not change based on state residency. Taxpayers must calculate their federal liability separately from state considerations. The distinction between state and federal duties is critical for accurate planning.
Specific State Nuances
New Hampshire previously taxed interest and dividends but has shifted its approach. Washington imposes a specific tax on large long-term gains despite lacking a general income tax. These exceptions require careful review. The table above helps distinguish general exemptions from specific levies. Readers should verify their state's current rules. Washington's structure differs from other no-income-tax states. Understanding these variations prevents unexpected liabilities. The table provides the necessary breakdown for each jurisdiction. Local rules may affect the total effective rate.
Calculating Your Liability
Use the calculator to estimate your total tax burden. The tool accounts for federal rates and state exemptions. Enter your filing status and income details for precise results. The key figures above provide a quick reference for common scenarios. Individual results may vary based on specific deductions and credits. The calculator reflects current tax year rules. It helps visualize the impact of state exemptions on your overall tax picture. Compare your estimated total against the baseline figures provided. This comparison aids in understanding your tax position relative to the average.
Questions
Do all states with no income tax exempt capital gains?
Most states without a general income tax also exempt capital gains. However, specific rules vary. Check the table above for your state's exact treatment of investment income.
Does the federal tax change if my state has no income tax?
No. Federal tax rules apply uniformly across all states. Your state residency does not alter the federal calculation method or rates for capital gains.
How does Washington differ from other no-income-tax states?
Washington imposes a specific tax on large long-term capital gains. This differs from states with no general income tax that fully exempt such gains.
Where can I find the current federal tax estimate?
The key figures above show the estimated federal liability for a standard example. Use the calculator for a personalized estimate based on your specific income and filing status.
Every figure on this page is computed by code from the 2026 federal brackets and capital gains thresholds (IRS Rev. Proc. 2025-32) and the 2026 state brackets. See the methodology.