Capital Gains Tax in Virginia (2026)
Virginia has no special capital gains rate — the state taxes your gain as ordinary income at 2% to 5.75%, and because the top rate starts at just $17,000 almost every gain is taxed at 5.75%. It stacks 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 + Virginia state
Virginia does not have a preferential long-term capital gains rate. Under Va. Code §58.1-320, both short- and long-term gains are taxed as ordinary income at 2%–5.75%. Because the top 5.75% bracket begins at only $17,000 of taxable income, virtually any meaningful gain is taxed at 5.75%. 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 Virginian can face a combined rate near 29.6% on a long-term gain.
Net proceeds $174,800$26,200
Show our work federal + VA, step by step
Estimates only, for the 2026 tax year. Not tax advice. Virginia's bracket thresholds ($3,000 / $5,000 / $17,000) are fixed by statute (Va. Code §58.1-320) and are not inflation-indexed. The 2026 standard deduction ($8,750 single / $17,500 joint) is scheduled to sunset after 2026 unless extended; figures are owner-verifiable against Virginia Tax.
How does Virginia tax capital gains?
Virginia gives capital gains no break at all. Under Va. Code §58.1-320, a capital gain is simply part of your Virginia taxable income and is taxed at the same graduated rates as wages — 2% at the bottom to 5.75% at the top. 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, Virginia taxes the whole gain as ordinary income.
The catch is where the top rate kicks in. Virginia's bracket thresholds — 2% to $3,000, 3% to $5,000, 5% to $17,000, and 5.75% on everything above $17,000 — were set in 1990 and have never been indexed to inflation. In practice that means anyone with more than $17,000 of taxable income pays 5.75% on their capital gain, so Virginia behaves like a near-flat 5.75% state on any meaningful gain. Virginia levies no local or city income tax, so 5.75% is the whole state story.
How does Virginia stack on top of federal?
The two systems run in parallel and the amounts are added — Virginia 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
- Virginia: your marginal state rate, 2%–5.75% (5.75% on any gain once taxable income tops $17,000), on the full gain under Va. Code §58.1-320.
Add those together and a top-bracket Virginian with a long-term gain can pay roughly 20% + 3.8% + 5.75% ≈ 29.6%. A short-term gain is worse, because the federal side jumps to ordinary rates (up to 37%) instead of 20% — while Virginia stays at 5.75%. The calculator above computes each layer separately and shows you the exact bands.
What are the 2026 Virginia income-tax brackets?
Virginia applies the same bracket thresholds to every filing status — single, married, and head of household alike (only the standard deduction differs). These thresholds are fixed by statute and owner-verifiable against the Virginia Tax rate schedule.
| Virginia taxable income (all filers) | Marginal rate |
|---|---|
| $0 – $3,000 | 2% |
| $3,000 – $5,000 | 3% |
| $5,000 – $17,000 | 5% |
| Over $17,000 | 5.75% |
| Local / municipal income tax on gains | None |
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 Virginia side takes the same taxable gain (after any §121 exclusion, since Virginia begins from federal AGI), subtracts the Virginia standard deduction from your ordinary income, and stacks the gain across the Virginia marginal brackets (2%/3%/5%/5.75%) under Va. Code §58.1-320. Because the top bracket starts at $17,000, any meaningful gain lands at 5.75%. The two results are summed.
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Primary sources (linked, not just named)
- Va. Code §58.1-320 — imposition & rates of tax
- Virginia Tax — individual income tax
- Virginia Tax — rate schedule & calculator
- 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
Virginia capital gains tax, answered
Does Virginia have a separate capital gains tax rate?
No. Virginia has no preferential capital gains rate. Under Va. Code §58.1-320, a capital gain — short-term or long-term — is taxed as ordinary income at the state's graduated rates of 2% to 5.75%. Because the top rate begins at just $17,000, virtually any meaningful gain is taxed at 5.75%. The federal short/long distinction does not exist at the Virginia level.
How much is capital gains tax in Virginia for 2026?
Your Virginia tax equals the gain taxed at your marginal state rate (up to 5.75%), 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. Because Virginia's top rate starts at $17,000, most sellers pay 5.75% on the gain; a top earner can pay near 20% + 3.8% + 5.75% ≈ 29.6% combined. Use the calculator above for your exact figure.
How does Virginia 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. Virginia ignores the holding period and taxes the entire gain as ordinary income at 2%–5.75% (5.75% for any meaningful gain). Your total tax is federal + NIIT + Virginia.
Why does Virginia's top rate start at only $17,000?
Virginia's bracket thresholds have not been updated since 1990 and are not indexed to inflation. The result is that the 5.75% top rate reaches almost all taxable income today, so for capital-gains purposes Virginia behaves like a near-flat 5.75% state. There is no additional high-income surtax and no local income tax on gains.
Does the 3.8% federal NIIT apply to Virginians?
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 Virginia state tax.
Does Virginia conform to the $250k/$500k home-sale exclusion?
Yes. Virginia begins from federal adjusted gross income, so the IRC §121 exclusion of up to $250,000 ($500,000 married filing jointly) on a primary residence is already removed before Virginia applies its rate. Only gain above the exclusion is taxed, as ordinary income. See our home-sale hub for the mechanics.
Compare Virginia with other state hubs
Virginia's effective 5.75% on capital gains is moderate — heavier than flat-tax Pennsylvania (3.07%) and Ohio (3.5%), lighter than New York (over 10%) and California (up to 13.3%), and far above the no-income-tax states like Texas and Florida. Every state page combines the same unit-tested federal engine with that state's own rules, so you always see the full combined number. The main Capital Gains Tax Calculator lets you fold any state's rate into your federal receipt.