Capital Gains Tax in Pennsylvania (2026)
Pennsylvania keeps it simple — one flat 3.07% personal income tax rate on your gain, no long-term break, no brackets — 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 + Pennsylvania state
Pennsylvania taxes capital gains at a flat 3.07%. Under 72 P.S. §7303, a net gain from selling property is one of Pennsylvania's classes of income and is taxed at the state's single 3.07% personal income tax rate — no long-term preference, no graduated brackets, and no standard deduction against it. That 3.07% 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). Pennsylvania generally excludes the gain on a principal residence, much like federal §121. A top-bracket Pennsylvanian can face a combined rate near 27% on a long-term gain.
Net proceeds $180,030$19,970
Show our work federal + PA, step by step
Estimates only, for the 2026 tax year. Not tax advice. Pennsylvania's 3.07% rate is a fixed statutory rate; the federal bracket thresholds and standard deductions are inflation-indexed each year by the IRS and are used here as projected 2026 amounts, marked est. and owner-verifiable against the final IRS release.
How does Pennsylvania tax capital gains?
Pennsylvania is one of the simplest states in the country for capital gains — and one of the flattest. Under 72 P.S. §7303, the "net gain or income from the disposition of property" is simply one of Pennsylvania's eight classes of income, and every class is taxed at the same single rate: 3.07%. There is no equivalent of the federal 0/15/20% long-term schedule, no graduated brackets, and no distinction between short-term and long-term. Whether you held the asset a week or a decade, Pennsylvania takes 3.07% of the gain.
Because the rate is flat, your Pennsylvania number is easy to sanity-check: it is always gain × 0.0307. A $100,000 gain is $3,070 of state tax; a $1,000,000 gain is $30,700. Your total income does not push you into a higher band, because Pennsylvania has no bands. That simplicity is the whole story on the state side — the complexity lives entirely on the federal side.
How does Pennsylvania stack on top of federal?
The two systems run in parallel and the amounts are added — Pennsylvania 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
- Pennsylvania: a flat 3.07% on the full gain under 72 P.S. §7303.
Add those together and a top-bracket Pennsylvanian with a long-term gain pays roughly 20% + 3.8% + 3.07% ≈ 26.9%. A short-term gain is worse, because the federal side jumps to ordinary rates (up to 37%) instead of 20% — but the Pennsylvania piece is still just 3.07%. The calculator above computes each layer separately and shows you the exact bands.
What is the 2026 Pennsylvania capital gains rate?
There is only one number to remember on the state side: 3.07%. This table lays out exactly what Pennsylvania does — and, just as importantly, what it does not do — with a capital gain.
| Pennsylvania treatment (2026) | Rate / rule |
|---|---|
| Personal income tax on net gains | 3.07% flat |
| Long-term vs. short-term | No distinction — same 3.07% |
| Graduated brackets | None |
| Standard deduction against the gain | None |
| Sale of a qualifying principal residence | Generally excluded · §7303 |
| Federal, stacked on top | 0/15/20% + 3.8% NIIT |
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 Pennsylvania side is deliberately simple, because the statute is: the taxable gain is multiplied by the flat 3.07% rate under 72 P.S. §7303 — there are no brackets, no state standard deduction, and no holding-period test. Gain on a qualifying principal residence is excluded, so its Pennsylvania tax is $0. The two results are summed.
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Primary sources (linked, not just named)
- 72 P.S. §7303 — classes of income / net gains
- Pennsylvania Department of Revenue — Personal Income Tax (3.07%)
- 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
- IRS Publication 523 — Selling Your Home
Pennsylvania capital gains tax, answered
Does Pennsylvania have a separate capital gains tax rate?
No. Pennsylvania has no preferential capital gains rate. Under 72 P.S. §7303, a net gain from selling property is one of the state's classes of income and is taxed at the flat 3.07% personal income tax rate. There is no long-term versus short-term distinction and no graduated brackets — the federal short/long split simply does not exist at the Pennsylvania level.
How much is capital gains tax in Pennsylvania for 2026?
Your Pennsylvania tax is 3.07% of the taxable gain, 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 Pennsylvanian might pay roughly 15% federal + 3.07% state; a top earner can pay near 20% + 3.8% + 3.07% ≈ 26.9% combined. Use the calculator above for your exact figure.
How does Pennsylvania 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. Pennsylvania ignores the holding period and taxes the entire net gain at a flat 3.07%. Your total tax is federal + NIIT + Pennsylvania.
Does Pennsylvania tax long-term and short-term gains differently?
No — both are taxed at the same flat 3.07%. The holding period only matters on the federal side, where it decides between the 0/15/20% long-term schedule and ordinary short-term rates. Pennsylvania applies 3.07% to a gain you held for one day exactly the same as one you held for twenty years.
Does the 3.8% federal NIIT apply to Pennsylvanians?
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 Pennsylvania's flat 3.07% tax.
Does Pennsylvania tax the sale of my home?
Generally no. Pennsylvania excludes the gain on the sale of a principal residence under 72 P.S. §7303, similar to the federal IRC §121 exclusion, if you owned and used the home as your principal residence for at least two of the prior five years. Pennsylvania's exclusion is not capped at the federal $250,000/$500,000 figures, so a qualifying home sale is usually fully exempt from the 3.07% state tax — even when part of the gain is still taxable federally. See our home-sale hub for the mechanics.
More state hubs
Pennsylvania is one of our growing set of state hubs — each one combines the same unit-tested federal engine with that state's own rules, so you always see the full combined number, not just half of it. Compare Pennsylvania's flat 3.07% with the very different pictures next door and around the country: California (taxed as ordinary income up to 13.3%), New York, Texas (no state income tax), and Florida (no state income tax). Until your state's page is live, the main Capital Gains Tax Calculator lets you fold any state's rate into your federal receipt.