Short-Term Capital Gains Tax (2026)
Sell an asset you held one year or less and the gain is taxed as ordinary income — 10% to 37%. Here are the 2026 brackets for every filing status, a worked example, and how one extra day can slash the bill.
Reviewed & updated · 2026 tax-year figures · Federal
Short-term capital gains — profit on assets held one year or less — are not taxed at a special rate. They are added to your other income and taxed as ordinary income at 10%, 12%, 22%, 24%, 32%, 35%, or 37% under IRC §1 and §1222. That is far steeper than the 0/15/20% long-term rates. High earners add the 3.8% Net Investment Income Tax (IRC §1411).
What is the short-term capital gains tax rate for 2026?
There is no dedicated short-term capital gains rate. When you hold a capital asset — a stock, a crypto token, an investment property — for one year or less and sell it at a profit, the gain is a short-term capital gain under IRC §1222(1). It lands on your return alongside your wages and is taxed at your ordinary marginal rate set by IRC §1. For most sellers that means 22%, 24%, or 32% — meaningfully more than a long-term investor pays.
Because the bracket depends on your total taxable income, the gain can straddle two brackets: part taxed at your current rate, part pushed into the next. That is why the honest way to calculate it is a marginal difference, not a single flat percentage.
| Rate | Taxable income range (2026, est.) |
|---|
Ranges are applied to taxable income (after the standard deduction) and are projected 2026 figures, marked est., owner-verifiable against the final IRS release. Source: IRC §1 · IRS Topic 409.
How is short-term capital gains tax calculated?
Four steps, matching the worksheet logic in IRS Publication 550:
- Net gain = sale proceeds − cost basis (what you paid, plus commissions and fees).
- Confirm it is short-term — the holding period is one year or less, counted from the day after purchase through the sale date (Topic 409).
- Stack it on ordinary income — add the gain to your other taxable income and read the 2026 brackets above.
- Add the 3.8% NIIT if modified AGI exceeds $200,000 single / $250,000 joint (IRC §1411).
The tax on the gain equals your total ordinary tax with the gain minus your total ordinary tax without it. Quoting your top bracket alone overstates the bill whenever the gain straddles a threshold.
What's the difference between short-term and long-term capital gains tax?
The dividing line is a single year, and it is worth real money. Long-term gains (held more than one year) get the preferential 0/15/20% rates of IRC §1(h); short-term gains get none of that relief.
Short-term
- Held 1 year or less
- Taxed as ordinary income (IRC §1)
- Same rate as your wages
- No 0% band, no 15% cap
- NIIT (3.8%) can still apply
Long-term
- Held more than 1 year
- Preferential rates (IRC §1(h))
- 0% band for lower incomes
- Most sellers land at 15%
- See the long-term guide
Worked example: the price of one extra day
A single filer earns $90,000 in wages and has a $50,000 gain on stock. After the 2026 standard deduction of $16,100, ordinary taxable income is $73,900. Does it matter whether they sell on day 365 or day 366? It changes the tax by nearly $3,900.
Sold at 12 months (short-term — ordinary rates)
| Ordinary tax on $73,900 (income only) | $10,970 |
| Ordinary tax on $123,900 (income + gain) | $22,334 |
| Short-term tax on the $50,000 gain | $11,364 |
The gain fills the rest of the 22% band and spills into 24% — an effective 22.7% on the gain.
Sold at 12 months + 1 day (long-term — IRC §1(h))
| Gain stacks above $73,900; 0% band already used | — |
| $50,000 × 15% (long-term rate) | $7,500 |
| Long-term tax on the same gain | $7,500 |
How these numbers are derived & where they come from
Short-term gains are classified under IRC §1222 and taxed at the ordinary rates of IRC §1. The tax on a gain is computed as a true marginal difference — full ordinary tax with the gain minus full ordinary tax without it — so multi-bracket straddles are handled correctly rather than approximated with a flat top rate. The 3.8% surtax follows IRC §1411. The 2026 bracket thresholds and the $16,100 single standard deduction are projected inflation-adjusted figures, marked est. and owner-verifiable against the final IRS release.
Primary sources (linked, not just named)
Short-term capital gains, answered
What is the short-term capital gains tax rate for 2026?
There is no separate short-term rate. Gains on assets held one year or less are taxed as ordinary income at 10%, 12%, 22%, 24%, 32%, 35%, or 37% (IRC §1 & §1222), based on your filing status and total taxable income. High earners may add the 3.8% NIIT (IRC §1411).
How is short-term capital gains tax calculated?
Add the net gain to your other taxable income, then apply the 2026 ordinary brackets. The tax on the gain is your total ordinary tax with the gain minus your tax without it — so the gain is taxed at your marginal rate and can straddle two brackets. It is not a single flat rate.
What's the difference between short-term and long-term capital gains tax?
Short-term (held ≤1 year) is ordinary income at 10%–37%; long-term (held >1 year) is 0/15/20% under IRC §1(h). The holding period runs from the day after purchase through the sale date, so one extra day past a full year can convert a 22%–37% rate into 15% — or even 0%. See the long-term rates guide.
How long must I hold an asset to avoid short-term rates?
More than one year — at least one year and one day. The clock starts the day after you acquire the asset (IRS Topic 409). Selling on the one-year anniversary is still short-term; selling the next day qualifies for long-term rates.
Do short-term gains push me into a higher tax bracket?
They can push your top dollars — including part of the gain — into a higher marginal bracket, but only those dollars above each threshold are taxed at the higher rate. The system is progressive; your whole income is not re-taxed at the top rate.
Does the 3.8% NIIT apply to short-term gains?
Yes. The Net Investment Income Tax (IRC §1411) applies to net investment income — including short-term gains — when MAGI exceeds $200,000 single / $250,000 joint. It is 3.8% on the lesser of net investment income or the amount of MAGI over the threshold, on top of the ordinary rate.