What is the Net Investment Income Tax (NIIT)?

The Net Investment Income Tax is a 3.8% surtax established by the Affordable Care Act that applies to net investment income — including long-term capital gains — for taxpayers whose modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married filing jointly. It is applied to the lesser of your net investment income or the amount by which your MAGI exceeds the threshold. The NIIT is separate from the regular capital gains tax and can push high-income investors’ effective long-term rate to 23.8% federally before state tax.

Which states have no capital gains tax?

Nine states impose no income tax at all and therefore no state-level capital gains tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Several other states tax capital gains at reduced rates or allow deductions. States like California and New York tax capital gains as ordinary income at rates up to 13.3% and 10.9% respectively, which can make state tax a larger cost than federal tax for high earners. Enter your state’s rate in the calculator to see the combined federal and state liability.

Capital Gains Tax Calculator 2025 (US) — Short & Long-Term Rates

Capital Gains Tax Calculator (US) · USUS Tax

Example result based on the prefilled values.

Federal CGT

$446.25

NIIT (3.8%)

$0.00

State Tax

$0.00

Total Tax

$446.25

Effective Rate

0.90%

Net Proceeds

$49,553.75

Continue your plan

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When to use this calculator

Before accepting a pay change, bonus, pension contribution, or salary-sacrifice option.
When you want to compare employed, self-employed, or dividend-based income scenarios.
When you need a simple take-home estimate before running payroll or filing returns.
When you are approaching the £100,000 income level and want to understand the personal allowance taper effect.
When you are planning a salary sacrifice arrangement and need to see the net pay impact before agreeing terms.

A realistic US planning example

Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.

Capital Gain ($)

50000

Holding Period

Short-term (held ≤ 1 year)

Filing Status

Single

Other Taxable Income ($)

$55,000

After entering these figures, review federal cgt, niit (3.8%) and state tax together rather than in isolation — each metric tells a different part of the story. Then rerun the tool with one input adjusted to see which variable has the biggest effect on all three outputs before you settle on a plan.

How to read your results

Federal CGT

Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.

NIIT (3.8%)

State Tax

Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result or a recommendation to make a tax decision.

Total Tax

Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result or a recommendation to make a tax decision.

Effective Rate

The effective rate lets you compare options on a true like-for-like basis rather than being misled by different compounding periods or fee structures. Use it to cut through headline marketing rates when shortlisting providers or products.

Net Proceeds

Method & assumptionsAuthoritative sources

This calculator applies the 2024 federal capital gains schedule. Short-term gains are taxed as ordinary income — federal tax is estimated by computing the marginal bracket difference between your other income alone and your other income plus the gain. Long-term gains use the preferential 0%, 15%, and 20% tiers based on taxable income and filing status. The 3.8% Net Investment Income Tax applies to long-term gains when modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly), per ACA rules.

State tax is applied as a flat rate on the full gain — enter your state’s effective rate for a blended estimate. The calculator does not model AMT, depreciation recapture on real property (25%), or collectibles (28%). The effective rate is total tax divided by the reported gain. Results are estimates only; consult a CPA or enrolled agent before filing.

Common mistakes

!Using an assumption that is not supported by a current local quote, bill, statement or official source.
!Treating a generic estimate as a lender, provider, payroll or tax authority decision.
!Mixing monthly and annual inputs without converting them consistently.
!Forgetting location-specific taxes, fees, eligibility rules or payroll deductions where they apply.
!Testing only one scenario instead of checking how a cautious assumption changes the result.

What to do next

Run a second scenario with a cautious assumption so you can see the downside clearly.
Compare the result with the related calculators below before making a decision.
Check current local rules, eligibility and provider terms before applying or committing money.
Keep a record of the assumptions so you can update the estimate when a quote, bill or pay figure changes.
Use the result to prepare better questions for a lender, provider, adviser or employer rather than treating it as a final answer.

Frequently asked

Short-term capital gains apply to assets held one year or less and are taxed as ordinary income, using the same progressive brackets as your wages — up to 37% federally. Long-term gains on assets held more than one year qualify for preferential rates of 0%, 15%, or 20% depending on your taxable income and filing status. For 2024, the 0% rate applies up to $47,025 for single filers. Choosing when to sell an asset can significantly affect your tax bill, and holding past the one-year mark is one of the most straightforward ways to reduce it.

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