Capital Gains Tax in Texas (2026)
Good news: Texas has no state income tax, so it does not tax capital gains at all. Your Texas state tax is $0 — you owe federal only (0/15/20% plus the 3.8% NIIT). Run the federal-only number below.
Reviewed & updated · 2026 tax-year figures · Federal only (Texas: $0 state)
Texas does not tax capital gains. There is no Texas personal income tax, so there is nothing at the state level to tax a gain — your Texas state capital gains tax is $0, whether the gain is short-term or long-term. You still owe federal capital gains tax — 0/15/20% on long-term gains under IRC §1(h), plus the 3.8% NIIT (§1411) for high earners — but nothing to the State of Texas. Compared with a state like California (up to 13.3%), a Texas resident can keep thousands more on the same sale.
Net proceeds $185,000$15,000
Show our work federal only, step by step
Estimates only, for the 2026 tax year. Not tax advice. Texas imposes no state income tax, so the state figure is $0 with no thresholds to index; the federal figures used here are marked est. as projected 2026 amounts, owner-verifiable against the final IRS release.
Does Texas tax capital gains?
No. Texas is one of the handful of states with no personal income tax at all, and a capital gain is simply a form of income. With no income tax on the books, there is no mechanism — and no rate — for the state to tax a gain. Whether you sell stock you held for a week or a home you held for a decade, Texas collects $0 on the gain. That is true for short-term and long-term gains alike, because the distinction only matters federally.
This is not an exemption buried in the tax code; it is structural. Texas has never levied a personal income tax, and it raises its revenue instead through sales tax, property tax, and the franchise (margin) tax on businesses. For an individual selling an appreciated asset, the only capital gains tax that applies is the federal one.
Why doesn't Texas tax capital gains?
Article VIII of the Texas Constitution governs taxation in the state, and Texas has simply never enacted a personal income tax under it. In 2019, voters went further and approved Proposition 4, adding §24 to Article VIII to prohibit the legislature from imposing an individual income tax without approval by a statewide referendum. In practical terms, that constitutional backstop makes a Texas income tax — and therefore a Texas capital gains tax — extremely unlikely to appear.
Because capital gains ride on the income-tax system, no income tax means no capital gains tax. There is no separate "capital gains" line for the state to fill in.
You still owe federal capital gains tax
Living in Texas removes the state tax, not the federal one. The IRS taxes a capital gain no matter which state you live in. For a long-term gain (asset held more than a year), 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
- Texas: $0 — no state income tax.
A short-term gain (held one year or less) is worse federally, because the federal side taxes it as ordinary income (up to 37%) instead of at the 0/15/20% long-term rate. But even then, Texas adds nothing. The calculator above computes the federal layers and shows the exact bands used.
The one caveat people ask about: the federal tax on a home, stock, or crypto sale
The most common Texas question is some version of "I sold my house / my Tesla stock / my Bitcoin — do I owe capital gains tax?" The honest answer is: not to Texas, but yes to the IRS. Each of those is a federal taxable event:
- Home sale: the federal IRC §121 exclusion lets you exclude up to $250,000 of gain ($500,000 married filing jointly) on a primary residence you owned and used for two of the last five years — only gain above that is federally taxable. See our home-sale hub.
- Stocks: long-term gains at 0/15/20%; short-term as ordinary income.
- Crypto: the IRS treats crypto as property, so a sale or swap is a taxable disposal — see our crypto hub.
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 Texas side is simple: Texas has no personal income tax, so the state tax is $0 with no brackets, thresholds, or deductions to apply. The total is therefore the federal amount alone.
CHECK
Primary sources (linked, not just named)
- Tex. Const. art. VIII — Taxation and Revenue
- Texas Comptroller — Texas Taxes
- 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
Texas capital gains tax, answered
Does Texas have a capital gains tax?
No. Texas has no state income tax, so it does not tax capital gains. The state tax on your gain is $0, short-term or long-term. You still owe federal capital gains tax — 0/15/20% on long-term gains under IRC §1(h), plus 3.8% NIIT (§1411) for high earners — but nothing to the State of Texas.
Why doesn't Texas tax capital gains?
Because Texas has no personal income tax, and a capital gain is a form of income. Article VIII of the Texas Constitution governs taxation, and the 2019 Proposition 4 amendment (§24) bars the legislature from imposing an individual income tax without a statewide vote. No income tax means no capital gains tax. Texas funds itself through sales tax, property tax, and the business franchise (margin) tax instead.
How much is capital gains tax in Texas for 2026?
Your total equals the federal tax only. A long-term gain is taxed federally at 0/15/20% under IRC §1(h), plus 3.8% NIIT if your MAGI exceeds $200,000 (single) or $250,000 (joint). The Texas state figure is $0, so a mid-income Texan might pay roughly 15% federal and nothing more. Use the calculator above for your exact federal figure.
Do I still owe federal tax on a home, stock, or crypto sale in Texas?
Yes — living in Texas removes the state tax, not the federal one. Selling a home, stocks, or crypto at a profit is a federal taxable event. Long-term gains are taxed at 0/15/20%; short-term as ordinary income; the 3.8% NIIT applies for high earners. The federal §121 exclusion still shelters up to $250,000 ($500,000 joint) of gain on a primary residence.
Does the 3.8% federal NIIT apply to Texans?
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. Texas having no income tax does not exempt you from this federal surtax.
How does Texas compare to California on capital gains?
They are opposite extremes. Texas taxes gains at 0% at the state level — you pay federal only. California taxes gains as ordinary income from 1% up to 13.3% on top of the same federal tax. On a large gain, a California resident can pay well over 13% more than a Texan on the identical sale. See our California hub for the contrast.
More state hubs
Texas is one of our no-income-tax state hubs — the same unit-tested federal engine, with the state layer set to its true value of $0. Every state page combines the federal number with that state's own rules, so you always see the full combined figure, not just half of it. Compare the extremes: California and New York tax gains heavily as ordinary income, while Florida, like Texas, adds nothing. Until your state's page is live, the main Capital Gains Tax Calculator lets you fold any state's top marginal rate into your federal receipt.