Capital Gains Tax in Wisconsin (2026)
Wisconsin taxes capital gains as ordinary income at 3.50%–7.65% — but excludes 30% of long-term gains, so a long-term gain is taxed on just 70%. That 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 + Wisconsin state
Wisconsin taxes gains as ordinary income — but gives long-term gains a 30% exclusion. Rates run 3.50% to 7.65% (Wis. Stat. §71.06), and under §71.05(6)(b)9 30% of a net long-term gain is excluded (60% for farm assets), so only 70% is taxed. The effective long-term rate is about 2.45%–5.36%; short-term gains get no break. It all stacks on the federal capital gains tax (0/15/20% under IRC §1(h)) and the 3.8% NIIT. A top-bracket Wisconsinite can face a combined rate near 29.2% on a long-term gain.
Net proceeds $174,800$26,200
Show our work federal + WI, step by step
Estimates only, for the 2026 tax year. Not tax advice. Wisconsin’s rates (3.50%–7.65%) and the 30% long-term exclusion are unchanged for 2026. The bracket thresholds shown are the Wisconsin DOR’s latest published schedule (2025 tax year); 2026 thresholds are inflation-adjusted a few percent higher, which does not change the effective rate for the wide 5.30% band where most gains fall. Owner-verifiable against the Wisconsin DOR.
How does Wisconsin tax capital gains?
Wisconsin taxes a capital gain as ordinary income under Wis. Stat. §71.06 — four graduated rates from 3.50% to 7.65%, the same rates as wages. But unlike most states, Wisconsin then gives long-term investors a break: under Wis. Stat. §71.05(6)(b)9, 30% of a net long-term capital gain is excluded from Wisconsin income (60% for gains on farm assets). So a long-term gain is taxed on only 70% of its value.
The exclusion turns Wisconsin’s headline rates into much gentler effective long-term rates: 2.45% (in the 3.50% band), 3.08% (4.40%), 3.71% (5.30%), and 5.36% at the top (7.65% × 70%). Because the 5.30% bracket is wide — it runs from about $50,000 to $323,000 of taxable income for a single filer — most sellers land there, giving an effective long-term rate near 3.71%. Short-term gains get no exclusion and are taxed in full. Wisconsin levies no local or county income tax on the gain.
How does Wisconsin stack on top of federal?
The two systems run in parallel and the amounts are added — Wisconsin 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
- Wisconsin: your marginal rate (3.50%–7.65%) on 70% of a long-term gain (or the full amount if short-term) under Wis. Stat. §71.06 and §71.05(6)(b)9.
Add those together and a top-bracket Wisconsinite with a long-term gain can pay roughly 20% + 3.8% + 5.36% ≈ 29.2%. A short-term gain is worse on both sides: the federal rate jumps to ordinary income (up to 37%) and Wisconsin drops the 30% exclusion, taxing the full gain at up to 7.65%. The calculator above computes each layer separately.
What are the Wisconsin income-tax brackets? (2025 schedule)
These are the brackets Wisconsin applies to your gain, shown for a single filer (head-of-household uses the same schedule; married-filing-jointly thresholds are wider; married-filing-separately are half of joint). These are the Wisconsin DOR’s latest published (2025) thresholds; the effective long-term rate column already applies the 30% exclusion. Owner-verifiable against the Wisconsin DOR.
| Wisconsin taxable income (single) | Rate | Effective LT |
|---|---|---|
| $0 – $14,680 | 3.50% | 2.45% |
| $14,680 – $50,480 | 4.40% | 3.08% |
| $50,480 – $323,290 | 5.30% | 3.71% |
| Over $323,290 | 7.65% | 5.36% |
| Local / county 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 Wisconsin side takes the same taxable gain (after any §121 exclusion). For a long-term gain it first excludes 30% (Wis. Stat. §71.05(6)(b)9), then stacks the remaining 70% across the Wisconsin brackets (3.50%–7.65%, Wis. Stat. §71.06) on top of your other income less the standard deduction; a short-term gain is stacked in full. The two results are summed.
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Primary sources (linked, not just named)
- Wis. Stat. §71.06 — rates of tax
- Wis. Stat. §71.05(6)(b)9 — 30% long-term capital gains exclusion
- Wisconsin DOR — individual income tax rates
- 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
Wisconsin capital gains tax, answered
Does Wisconsin have a separate capital gains tax rate?
Sort of — long-term gains get a 30% exclusion. Gains are taxed as ordinary income at 3.50%–7.65% (Wis. Stat. §71.06), but 30% of a net long-term gain is excluded (§71.05(6)(b)9), so only 70% is taxed — an effective 2.45%–5.36%. Short-term gains are taxed in full.
How much is capital gains tax in Wisconsin for 2026?
For a long-term gain, Wisconsin taxes 70% of it at 3.50%–7.65% — an effective 2.45%–5.36%. Federally a long-term gain is taxed at 0/15/20% (IRC §1(h)) plus 3.8% NIIT. A mid-income seller often lands at an effective ~3.71% state (5.30% band); a top earner can pay near 20% + 3.8% + 5.36% ≈ 29.2% combined. Use the calculator above for your exact figure.
How does Wisconsin 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. Wisconsin excludes 30% of a long-term gain, then taxes the remaining 70% at 3.50%–7.65% (short-term gains taxed in full). Your total tax is federal + NIIT + Wisconsin.
How does the 30% long-term exclusion work?
You subtract 30% of net long-term gain before the rate applies (Wis. Stat. §71.05(6)(b)9); 60% for farm assets. On a $100,000 long-term gain, only $70,000 is taxed. Across the brackets that means effective long-term rates of 2.45% to 5.36%. Short-term gains receive no exclusion. The calculator applies the 30% automatically for long-term gains.
Does the 3.8% federal NIIT apply to Wisconsinites?
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 Wisconsin state tax.
Does Wisconsin conform to the $250k/$500k home-sale exclusion?
Yes. Wisconsin follows the IRC §121 exclusion of up to $250,000 ($500,000 joint) on a primary residence. Any remaining long-term gain then also gets the 30% Wisconsin exclusion before tax. See our home-sale hub for the mechanics.
Compare Wisconsin with other state hubs
Thanks to its 30% exclusion, Wisconsin’s effective long-term rate (~2.45%–5.36%) is one of the lightest among income-tax states — well below Minnesota (9.85%) and Oregon (9.9%) next door, below Virginia (5.75%), and comparable to flat-tax Illinois (4.95%). Only the no-income-tax states like Texas beat it. Every state page combines the same unit-tested federal engine with that state’s own rules. The main Capital Gains Tax Calculator lets you fold any state’s rate into your federal receipt.