Capital Gains Tax in New Jersey (2026)
New Jersey has no special capital gains rate — the state taxes your gain as ordinary income, 1.4% to 10.75%, stacked on top of the federal 0/15/20% tax and the 3.8% NIIT. Run the combined number below.
Reviewed & updated · 2026 tax-year figures · Federal + New Jersey state
New Jersey does not have a preferential long-term capital gains rate. Under N.J.S.A. 54A:5-1, net gains from the disposition of property are a category of gross income, so both short- and long-term gains are taxed as ordinary income at 1.4%–10.75% under the graduated schedule in N.J.S.A. 54A:2-1 — the 10.75% top rate applying to taxable income over $1M. That state tax is added on top of the federal capital gains tax (0/15/20% long-term under IRC §1(h)) and the 3.8% NIIT (§1411). A top-bracket New Jerseyan can face a combined rate above 34% on a long-term gain.
Net proceeds $176,730$23,270
Show our work federal + NJ, step by step
Estimates only, for the 2026 tax year. Not tax advice. New Jersey bracket thresholds and personal exemptions are set by statute; the figures used here are marked est. as projected 2026 amounts, owner-verifiable against the final NJ Division of Taxation release.
How does New Jersey tax capital gains?
New Jersey is one of the states that gives capital gains no break at all. Under N.J.S.A. 54A:5-1, "net gains or income from disposition of property" is simply one of the enumerated categories of gross income, taxed at the same graduated rates as wages — 1.4% at the bottom to 10.75% at the top under N.J.S.A. 54A:2-1. There is no equivalent of the federal 0/15/20% long-term schedule and no distinction between short-term and long-term at the state level. Whether you held the asset a week or a decade, New Jersey taxes the whole gain as ordinary income.
New Jersey's top bracket applies a 10.75% marginal rate to taxable income over $1,000,000. A large one-time gain — selling a business, a long-held Shore property, or a block of RSUs — is exactly the kind of event that can push a household into that top bracket for a single year, so the slice of income above $1M is taxed at 10.75%.
How does New Jersey stack on top of federal?
The two systems run in parallel and the amounts are added — New Jersey does not replace or absorb the federal tax. For a long-term gain, you owe:
- Federal: 0%, 15%, or 20% depending on where the gain stacks on your taxable income, under IRC §1(h);
- Federal NIIT: an extra 3.8% on net investment income once MAGI passes $200,000 (single) / $250,000 (joint), under IRC §1411; and
- New Jersey: your marginal state rate, 1.4%–10.75%, on the full gain under N.J.S.A. 54A:5-1 / 54A:2-1.
Add those together and a top-bracket New Jerseyan with a long-term gain can pay roughly 20% + 3.8% + 10.75% ≈ 34.6%. A short-term gain is worse, because the federal side jumps to ordinary rates (up to 37%) instead of 20%. The calculator above computes each layer separately and shows you the exact bands.
What are the 2026 New Jersey income-tax brackets? (est.)
These are the marginal brackets New Jersey applies to your gain, shown for a single filer (and married filing separately). Married-filing-jointly and head-of-household use a slightly wider schedule at the low end. All figures are projected 2026 amounts (est.), owner-verifiable against the NJ Division of Taxation rate schedules.
| Taxable income (single, est.) | Marginal rate |
|---|---|
| $0 – $20,000 | 1.4% |
| $20,000 – $35,000 | 1.75% |
| $35,000 – $40,000 | 3.5% |
| $40,000 – $75,000 | 5.525% |
| $75,000 – $500,000 | 6.37% |
| $500,000 – $1,000,000 | 8.97% |
| Taxable income over $1,000,000 | 10.75% (top) · §54A:2-1 |
How this calculator works & where the numbers come from
No black box. The federal side uses the same unit-tested engine as our main calculator: net gain = proceeds − basis; classify by holding period; for long-term gains, subtract the standard deduction and stack the gain across the 0/15/20% bands per IRC §1(h); add 3.8% NIIT where modified AGI crosses the §1411 threshold; short-term gains are computed as the true marginal difference in ordinary tax. The New Jersey side takes the same taxable gain (after any §121 exclusion, since New Jersey conforms), subtracts the New Jersey personal exemption from your ordinary income, and stacks the gain across the New Jersey marginal brackets under N.J.S.A. 54A:2-1, with the gain treated as category income under N.J.S.A. 54A:5-1. The two results are summed.
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Primary sources (linked, not just named)
- N.J.S.A. 54A:5-1 — categories of gross income
- N.J.S.A. 54A:2-1 — rate of tax
- NJ Division of Taxation — tax rate schedules
- 26 U.S.C. §1(h) — federal capital gains rates
- 26 U.S.C. §1411 — 3.8% NIIT
- 26 U.S.C. §121 — home-sale exclusion
- IRS Topic No. 409 — Capital Gains and Losses
- IRS Publication 550 — Investment Income
New Jersey capital gains tax, answered
Does New Jersey have a separate capital gains tax rate?
No. New Jersey has no preferential capital gains rate. Under N.J.S.A. 54A:5-1, a capital gain — short-term or long-term — is a category of gross income and is taxed as ordinary income at the state's graduated rates of 1.4% to 10.75% (N.J.S.A. 54A:2-1). The federal short/long distinction does not exist at the New Jersey level.
How much is capital gains tax in New Jersey for 2026?
Your New Jersey tax equals the gain taxed at your marginal state rate (1.4%–10.75%), added to the federal capital gains tax. Federally, a long-term gain is taxed at 0/15/20% (IRC §1(h)) plus 3.8% NIIT for high earners. A mid-income New Jerseyan might pay roughly 15% federal + ~6.37% state; a top earner can pay near 20% + 3.8% + 10.75% ≈ 34.6% combined. Use the calculator above for your exact figure.
How does New Jersey capital gains tax stack on top of federal?
They are computed separately and summed. The federal side taxes long-term gains at 0/15/20% and adds 3.8% NIIT for high earners; short-term gains are ordinary income. New Jersey ignores the holding period and taxes the entire gain as ordinary income at 1.4%–10.75%. Your total tax is federal + NIIT + New Jersey.
What is New Jersey's top 10.75% rate over $1 million?
N.J.S.A. 54A:2-1 applies a 10.75% marginal rate to taxable income above $1,000,000. A single large capital gain can push a household into that top bracket for one year, so the calculator applies the 10.75% rate automatically to the portion of income plus gain that crosses the $1M line. Below $500,000 the rate is 6.37%; between $500,000 and $1,000,000 it is 8.97%.
Does the 3.8% federal NIIT apply to New Jerseyans?
Yes — the NIIT is federal and applies in every state. Once modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly), the 3.8% surtax under IRC §1411 hits the lesser of your net investment income or the amount over the threshold. It is added to your federal capital gains tax and is entirely separate from New Jersey state tax.
Does New Jersey conform to the $250k/$500k home-sale exclusion?
Yes. New Jersey conforms to the IRC §121 exclusion. Up to $250,000 of gain ($500,000 married filing jointly) on a primary residence is excluded for both federal and New Jersey purposes if you owned and used the home for two of the last five years. Only gain above the exclusion is taxed by New Jersey, as ordinary income. Note that a nonresident selling New Jersey property must still make a GIT/REP estimated payment at closing (the "exit tax") — a prepayment, not an extra tax. See our home-sale hub for the mechanics.
Compare other state hubs
New Jersey is one of our state hubs — each clones the same unit-tested federal engine and layers on that state's own rules, so you always see the full combined number, not just half of it. Compare the high-tax states with a no-income-tax state:
- California capital gains tax — ordinary income up to 13.3%
- New York capital gains tax — ordinary income up to 10.9%
- Texas capital gains tax — no state income tax (federal only)
- Florida capital gains tax — no state income tax (federal only)
- Main Capital Gains Tax Calculator — fold any state's rate into your federal receipt