Wealthy Americans likely breathed a collective sigh of relief when President Joe Biden revealed his $2 trillion infrastructure plan.

Despite the president's campaign pledge to raise the capital gains tax rate, the new plan doesn't include any changes in that regard.

However, when it comes to capital gains tax, it's not just the federal tax rate that matters. States can also set their own tax rates, and some may have changes on the horizon. In the state of Washington, the governor has proposed a capital gains tax that could raise almost $1 billion if passed.

To provide the most recent info on capital gains taxes, we've collected data on long and short-term capital gains tax rates at both the federal and state level.

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Federal capital gains tax rates
State capital gains tax rates

What is capital gains tax?

Capital gains tax is the tax you pay after selling an asset that has increased in value. Assets subject to capital gains tax include stocks, real estate, cryptocurrency, and businesses. You pay capital gains tax on the profit you made from the sale.

Most investment income is considered a capital gain, but there are some exceptions. Dividends are counted as ordinary income, for example, but qualified dividends are treated as a capital gain.

For example, if you buy a stock for $100 and sell it for $150, you have a capital gain of $50. You'd pay capital gains tax on that $50. Capital gains are an essential part of understanding how investing and taxes work.

There are exclusions for certain types of capital gains that can help you reduce your taxes. The home sale exclusion is one of the most common. If you've owned and used your house as your main home for at least two out of five years prior to its date of sale, you can exclude up to $250,000 in capital gains if you're a single filer or $500,000 if you're filing jointly with your spouse.

It's also worth noting that only a realized gain can be a capital gain. If you have a stock that goes up in value, but you don't sell it, that's an unrealized gain and isn't taxed.

What is short-term capital gains tax?

Short-term capital gains tax is what you pay on assets that you sell within a year of acquiring them. If you bought a share of Tesla (NASDAQ:TSLA) and sold it for a profit six months later, you would pay short-term capital gains tax.

This type of capital gain is taxed as ordinary taxable income on your federal taxes.

What is long-term capital gains tax?

Long-term capital gains tax is what you pay on assets that you sell after owning them for more than a year. If you bought Bitcoin (CRYPTO:BTC) in 2018 and sold it for a profit in 2020, that's a long-term capital gain. So you'd include that on your tax return and pay long-term capital gains tax.

(Note: because you report the realized gain on your asset, it's important to keep track of your cost basis -- fortunately, stock brokers do this for you, but you'll need to do it yourself on things like property and businesses.)

Federal tax rates are lower for long-term capital gains, which is why it's generally recommended to hold assets for at least a year to minimize your tax liability. If you're generating capital gains, tax planning is extra-important.

2021 federal capital gains tax rates

The tables below show marginal tax rates. This means that different portions of your taxable income may be taxed at different rates.

For example, a single filer who made $10,000 would pay 10% income tax on their first $9,950 and 12% on the remaining $50. That's a total of $1,001 in tax and an overall tax rate of 10.01%.

Federal short-term capital gains tax rates

Federal tax rates on short-term capital gains are equal to income tax rates. Here are the 2021 short-term capital gains and income tax rates:

Federal short-term capital gains/income tax rate Single Married filing jointly Married filing separately Head of household
10% Up to $9,950 Up to $19,900 Up to $9,950 Up to $14,200
12% $9,951 to $40,525 $19,901 to $81,050 $9,951 to $40,525 $14,201 to $54,200
22% $40,526 to $86,375 $81,051 to $172,750 $40,526 to $86,375 $54,201 to $86,350
24% $86,376 to $164,925 $172,751 to $329,850 $86,376 to $164,925 $86,351 to $164,900
32% $164,926 to $209,425 $329,851 to $418,850 $164,926 to $209,425 $164,901 to $209,400
35% $209,426 to $523,600 $418,851 to $628,300 $209,426 to $314,150 $209,401 to $523,600
37% Over $523,600 Over $628,300 Over $314,150 Over $523,600

Data source: Internal Revenue Service (2020).

Federal long-term capital gains tax rates

Remember that long-term capital gains rates apply to assets that you sold after holding them for at least a year.

Federal long-term capital gains tax rate Single Married filing jointly Married filing separately Head of household
0% Up to $40,400 Up to $80,800 Up to $40,400 Up to $54,100
15% $40,401 to $445,850 $80,801 to $501,600 $40,401 to $250,800 $54,101 to $473,750
20% Over $445,850 Over $501,600 Over $250,800 Over $473,750 

Data source: Internal Revenue Service (2020).

State capital gains tax rates

Each state has its own method of taxing capital gains. Most states tax capital gains as income. In states that do this, the state income tax applies to both long- and short-term capital gains.

Keep in mind that if your state taxes capital gains as income, you'll add your capital gains to your other ordinary income, which may put you in a higher tax bracket.

There are also plenty of states that handle capital gains differently. Some allow taxpayers to deduct a certain amount of capital gains. Others don't tax income or capital gains at all.

The sections below cover every state's tax laws for capital gains. Keep in mind that many states have special rules that apply to the sale of certain assets, such as exclusions for collectibles purchased before a certain year.

Not every rule for every situation is included. Taxpayers should always review the capital gains rules in their state so they know about any relevant exceptions.

Also, it's important to note that this is the most recent data for each state at the time of this writing -- to get exact figures, taxpayers should consult their state's online documentation. If you have questions about capital gains on your tax return, it's a good idea to consult that documentation or a tax professional.

Alabama

Alabama taxes capital gains as income.

Alabama income and capital gains tax rates

Tax rate Single Married filing jointly Married filing separately Head of household
2% Up to $500 Up to $1,000 Up to $500 Up to $500
4% $501 to $3,000 $1,001 to $6,000 $501 to $3,000 $501 to $3,000
5% Over $3,000 Over $6,000 Over $3,000 Over $3,000

Data source: Alabama Department of Revenue.

Alaska

Alaska does not tax personal income or capital gains.

Arizona

Arizona taxes capital gains as income.

Arizona income and capital gains tax rates

Tax rate Single Married filing jointly Married filing separately Head of household
2.59% Up to $27,272 Up to $54,544 Up to $27,272 Up to $54,544
3.34% $27,273 to $54,544 $54,545 to $109,088 $27,273 to $54,544 $54,545 to $109,088
4.17% $54,545 to $163,632 $109,089 to $327,263 $54,545 to $163,632 $109,089 to $327,263
4.50% Over $163,632 Over $327,263 Over $163,632 Over $327,263

Data source: Arizona Department of Revenue.

Arkansas

In Arkansas, 50% of long-term capital gains are treated as income. All short-term capital gains are treated as income. Tax rates are the same for every filing status.

Arkansas income and capital gains tax rates

Tax rate Annual income under $22,200
0.0% Up to $4,499
2.0% $4,500 to $8,899
3.0% $8,900 to $13,399
3.4% $13,400 to $22,199

Tax rate Annual income between $22,200 and $79,300
0.75% Up to $4,499
2.5% $4,500 to $8,899
3.5% $8,900 to $13,399
4.5% $13,400 to $22,199
5.0% $22,200 to $37,199
6.0% $37,200 to $79,300

Tax rate Annual income over $79,300
2.0% Up to $4,000
4.0% $4,001 to $8,000
5.9% $8,001 and above

Data source: Arkansas Economic Development Commission.

Incomes between the amounts of $79,300 and $84,600 also reduce the amount of income tax due as follows:

  • $79,301 to $80,300: $440
  • $80,301 to $81,300: $340
  • $81,301 to $82,500: $240
  • $82,501 to $83,600: $140
  • $83,601 to $84,600: $40
  • $84,601 and above: $0

California

California taxes capital gains as income.

California income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

1%

Up to $8,932

$0 to $17,864

Up to $8,932

$0 to $17,864

2%

$8,933 to $21,175

$17,865 to $42,350

$8,933 to $21,175

$17,865 to $42,353

4%

$21,176 to $33,421

$42,351 to $66,842

$21,176 to $33,421

$42,354 to $54,597

6%

$33,422 to $46,394

$66,843 to $92,788

$33,422 to $46,394

$54,598 to $67,569

8%

$46,395 to $58,634

$92,789 to $117,268

$46,395 to $58,634

$67,570 to $79,812

9.3%

$58,635 to $299,508

$117,269 to $599,016

$58,635 to $299,508

$79,813 to $407,329

10.3%

$299,509 to $359,407

$599,017 to $718,814

$299,509 to $359,407

$407,330 to $488,796

11.3%

$359,408 to $599,012

$718,815 to $1,198,024

$359,408 to $599,012

$488,797 to $814,658

12.3%

Over $599,012 $1,198,025 or more Over $599,012 $814,659 or more

Data source: State of California Franchise Tax Board.

Colorado

Colorado taxes capital gains as income. The state income tax is a flat rate of 4.63%.

Connecticut

Connecticut has a capital gains tax of 7%. This applies to long-term and short-term capital gains.

Delaware

Delaware taxes capital gains as income. Tax rates are the same for every filing status.

Delaware income and capital gains tax rates

Tax rate

Income

0.0%

Up to $1,999

2.2%

$2,000 to $4,999

3.9%

$5,000 to $9,999 

4.8%

$10,000 to $19,999

5.2%

$20,000 to $24,999

5.55%

$25,000 to $59,999

6.6%

$60,000 or higher

Data source: Delaware Division of Revenue.

Florida

Florida does not tax personal income or capital gains.

Georgia

Georgia taxes capital gains as income.

Georgia income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

1.00%

Up to $750

Up to $1,000

Up to $500

Up to $1,000

2.00%

$751 to $2,250

$1,001 to $3,000

$501 to $1,500

$1,001 to $3,000

3.00%

$2,251 to $3,750

$3,001 to $5,000

$1,501 to $2,500

$3,001 to $5,000

4.00%

$3,751 to $5,250

$5,001 to $7,000

$2,501 to $3,500

$5,001 to $7,000

5.00%

$5,251 to $7,000

$7,001 to $10,000

$3,501 to $5,000

$7,001 to $10,000

5.75%

Over $7,000

Over $10,000

Over $5,000

Over $10,000

Data source: Georgia Department of Revenue.

Hawaii

Hawaii's capital gains tax rate is 7.25%. That applies to both long- and short-term capital gains. There is currently a bill that, if passed, would increase the capital gains tax in Hawaii to 11.00% and would also increase the state's income tax.

Idaho

Idaho taxes capital gains as income.

Idaho income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

1.125%

Up to $1,567

Up to $3,135

Up to $1,567

Up to $3,135

3.125%

$1,568 to $3,135

$3,136 to $6,271

$1,568 to $3,135

$3,136 to $6,271

3.625%

$3,136 to $4,703

$6,272 to $9,407

$3,136 to $4,703

$6,272 to $9,407

4.625%

$4,704 to $6,271

$9,408 to $12,543

$4,704 to $6,271

$9,408 to $12,543

5.625%

$6,272 to $7,839

$12,544 to $15,679

$6,272 to $7,839

$12,544 to $15,679

6.625%

$7,840 to $11,759

$15,680 to $23,519

$7,840 to $11,759

$15,680 to $23,519

6.925%

Over $11,759

Over $23,519

Over $11,759

Over $23,519

Data source: Idaho State Tax Commission.

Illinois

Illinois taxes capital gains as income. The Illinois state income tax is a flat rate of 4.95%.

Indiana

Indiana taxes capital gains as income. The Indiana state income tax is a flat rate of 3.23%.

Iowa

Iowa taxes capital gains as income. Tax rates are the same for every filing status.

Iowa income and capital gains tax rate

Tax rate

Income

0.33%

Up to $1,676

0.67%

$1,677 to $3,352

2.25%

$3,353 to $6,704

4.14%

$6,705 to $15,084

5.63%

$15,085 to $25,140

5.96%

$25,141 to $33,520

6.25%

$33,521 to $50,280

7.44%

$50,281 to $75,420

8.53%

Over $75,420

Data source: Iowa Department of Revenue.

Kansas

Kansas taxes capital gains as income.

Kansas income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

3.10%

Up to $15,000

Up to $30,000

Up to $15,000

Up to $15,000

5.25%

$15,001 to $30,000

$30,001 to $60,000

$15,001 to $30,000

$15,001 to $30,000

5.70%

Over $30,000

Over $60,000

Over $30,000

Over $30,000

Data source: Kansas Department of Revenue.

Kentucky

Kentucky taxes capital gains as income. The Kentucky state income tax is a flat rate of 5%.

Louisiana

Louisiana taxes capital gains as income.

Louisiana income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

2%

Up to $12,500

Up to $25,000

Up to $12,500

Up to $12,500

4%

$12,501 to $50,000

$25,001 to $100,000

$12,501 to $50,000

$12,501 to $50,000

6%

Over $50,000

Over $100,000

Over $50,000

Over $50,000

Data source: Louisiana Department of Revenue.

Maine

Maine taxes capital gains as income.

Maine income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

5.80%

Up to $22,199

Up to $44,449

Up to $22,199

Up to $33,299

6.75%

$22,200 to $52,599

$44,450 to $105,199

$22,200 to $52,599

$33,300 to $78,899

7.15%

$52,600 or more

$105,200 or more

$52,600 or more

$78,900 or more

Data source: Maine Revenue Services.

Maryland

Maryland taxes capital gains as income. 

Maryland income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

2.00%

Up to $1,000

Up to $1,000

Up to $1,000

Up to $1,000

3.00%

$1,001 to $2,000

$1,001 to $2,000

$1,001 to $2,000

$1,001 to $2,000

4.00%

$2,001 to $3,000

$2,001 to $3,000

$2,001 to $3,000

$2,001 to $3,000

4.75%

$3,001 to $100,000

$3,001 to $150,000

$3,001 to $100,000

$3,001 to $150,000

5.00%

$100,001 to $125,000

$150,001 to $175,000

$100,001 to $125,000

$150,001 to $175,000

5.25%

$125,001 to $150,000

$175,001 to $225,000

$125,001 to $150,000

$175,001 to $225,000

5.50%

$150,001 to $250,000

$225,001 to $300,000

$150,001 to $250,000

$225,001 to $300,000

5.75%

Over $250,000

Over $300,000

Over $250,000

Over $300,000

Data source: Comptroller of Maryland.

Massachusetts

Massachusetts taxes both income and most long-term capital gains at a flat rate of 5%. There are, however, certain types of capital gains that are taxed at 12% in Massachusetts. The 12% capital gains tax applies to the following:

  • Short-term capital gains.
  • Long-term capital gains on collectibles and pre-1996 installment sales.
  • Gains on the sale of a property when used in a trade or business for one year or less.

Michigan

Michigan taxes capital gains as income. The Michigan state income tax is a flat rate of 4.25%.

Minnesota

Minnesota taxes capital gains as income.

Minnesota income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

5.35%

Up to $27,230

Up to $39,810

Up to $19,905

Up to $33,520

6.80%

$27,231 to $89,440

$39,811 to $158,140

$19,906 to $79,107

$33,521 to $134,700

7.85%

$89,441 to $166,040

$158,141 to $276,200

$79,108 to $138,100

$134,701 to $220,730

9.85%

Over $166,040

Over $276,200

Over $138,100

Over $220,730

Data source: Minnesota Department of Revenue.

Mississippi

Mississippi taxes capital gains as income. Tax rates are the same for every filing status.

Mississippi income and capital gains tax rates

Tax rate

Income

0%

Up to $3,000

3%

$3,001 to $5,000

4%

$5,001 to $10,000

5%

Over $10,000

Data source: Mississippi Department of Revenue.

Missouri

Missouri taxes capital gains as income. Tax rates are the same for every filing status.

Missouri income and capital gains tax rates

Tax rate

Income

0.0%

Up to $106

1.5%

$107 to $1,073

2.0%

$1,074 to $2,146

2.5%

$2,147 to $3,219

3.0%

$3,220 to $4,292

3.5%

$4,293 to $5,365

4.0%

$5,366 to $6,438

4.5%

$6,439 to $7,511

5.0%

$7,512 to $8,584

5.4%

Over $8,584

Data source: Missouri Department of Revenue.

Montana

Montana taxes capital gains as income, but it has a 2% capital gains credit. Since its highest income tax rate is 6.9%, its highest capital gains tax rate is 4.9%. Tax rates are the same for every filing status.

Montana income tax rates

Tax rate

Income

1.0%

Up to $3,100

2.0%

$3,101 to $5,500

3.0%

$5,501 to $8,400

4.0%

$8,401 to $11,300

5.0%

$11,301 to $14,500

6.0%

$14,501 to $18,700

6.9%

Over $18,700

Data source: Montana Department of Revenue.

Nebraska

Nebraska taxes capital gains as income.

Nebraska income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

2.46%

Up to $3,340

Up to $6,660

Up to $3,340

Up to $6,220

3.51%

$3,341 to $19,990

$6,661 to $39,990

$3,341 to $19,990

$6,221 to $31,990

5.01%

$19,991 to $32,210

$39,991 to $64,430

$19,991 to $32,210

$31,991 to $47,760

6.84%

Over $32,210

Over $64,430

Over $32,210

Over $47,760

Data source: Nebraska Department of Revenue.

Nevada

Nevada does not tax personal income or capital gains.

New Hampshire

New Hampshire does not tax personal income or capital gains.

New Jersey

New Jersey taxes capital gains as income.

New Jersey income and capital gains tax rates

Tax rate

Single and married filing separately

1.40%

Up to $20,000

1.75%

$20,001 to $35,000

3.50%

$35,001 to $40,000

5.525%

$40,001 to $75,000

6.37%

$75,001 to $500,000

8.97%

$500,001 to $5,000,000

10.75%

Over $5,000,000

Tax rate

Married filing jointly and head of household

1.40%

Up to $20,000

1.75%

$20,001 to $50,000

2.45%

$50,001 to $70,000

3.50%

$70,001 to $80,000

5.525%

$80,001 to $150,000

6.37%

$150,001 to $500,000

8.97%

$500,000 to $5,000,000

10.75%

Over $5,000,000

Data source: New Jersey Division of Taxation.

New Mexico

New Mexico taxes capital gains as income. The state allows filers to deduct either 40% of capital gains income or $1,000, whichever is greater.

New Mexico income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

1.70%

Up to $5,500

Up to $8,000

Up to $4,000

Up to $8,000

3.20%

$5,501 to $11,000

$8,001 to $16,000

$4,401 to $8,000

$8,001 to $16,000

4.70%

$11,001 to $16,000

$16,001 to $24,000

$8,001 to $12,000

$16,001 to $24,000

4.90%

$16,001 to $210,000

$24,001 to $315,000

$12,001 to $157,500

$24,001 to $315,000

5.90%

Over $210,000

Over $315,000

Over $157,500

Over $315,000

Data source: Tax News Update U.S. Edition.

New York

New York taxes capital gains as income.

New York income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

4.00%

Up to $8,500

Up to $17,150

Up to $8,500

Up to $12,800

4.50%

$8,501 to $11,700

$17,151 to $23,600

$8,501 to $11,700

$12,801 to 17,650

5.25%

$11,701 to $13,900

$23,601 to $27,900

$11,701 to $13,900

$17,651 to $20,900

5.90%

$13,901 to $21,400

$27,901 to $43,000

$13,901 to $21,400

$20,901 to $32,200

6.09%

$21,401 to $80,650

$43,001 to $161,550

$21,401 to $80,650

$32,201 to $107,650

6.41%

$80,651 to $215,400

$161,551 to $323,200

$80,651 to $215,400

$107,651 to $269,300

6.85%

$215,401 to $1,077,550

$323,201 to $2,155,350

$215,401 to $1,077,550

$269,301 to $1,616,450

8.82%

Over $1,077,550

Over $2,155,350

Over $1,077,550

Over $1,616,450

Data source: New York State Department of Taxation and Finance.

North Carolina

North Carolina taxes capital gains as income. The North Carolina state income tax is a flat rate of 5.25%.

North Dakota

North Dakota taxes capital gains as income. The state allows filers to deduct 40% of capital gains income.

North Dakota income tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

1.10%

Up to $40,525

Up to $67,700

Up to $33,850

Up to $54,300

2.04%

$40,526 to $98,100

$67,701 to $163,550

$33,851 to $81,775

$54,301 to $140,200

2.27%

$98,101 to $204,675

$163,551 to $249,150

$81,776 to $124,575

$140,201 to $226,950

2.64%

$204,676 to $445,000

$249,151 to $445,000

$124,576 to $222,500

$226,951 to $445,000

2.90%

Over $445,000

Over $445,000

Over $222,500

Over $445,000

Data source: North Dakota Office of State Tax Commissioner.

Ohio

Ohio taxes capital gains as income. Tax rates are the same for every filing status.

Ohio income and capital gains tax rates

Tax rate

Income

0.00%

Up to $22,150

2.85%

$22,151 to $44,250

3.326%

$44,251 to $88,450

3.802%

$88,451 to $110,650

4.413%

$110,651 to $221,300

4.797%

Over $221,300

Data source: Ohio Department of Taxation.

Oklahoma

Oklahoma taxes capital gains as income. Taxpayers can deduct 100% of their capital gains resulting from

  • the sale of property in Oklahoma that was owned for at least five uninterrupted years; or
  • the sale of stock or ownership interest in an Oklahoma company, limited liability company, or partnership where the stock or ownership interest was held for at least two uninterrupted years.

Oklahoma income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

0.50%

Up to $1,000

Up to $2,000

Up to $1,000

Up to $2,000

1.00%

$1,001 to $2,500

$2,001 to $5,000

$1,001 to $2,500

$2,001 to $5,000

2.00%

$2,501 to $3,750

$5,001 to $7,500

$2,501 to $3,750

$5,001 to $7,500

3.00%

$3,751 to $4,900

$7,501 to $9,800

$3,751 to $4,900

$7,501 to $9,800

4.00%

$4,901 to $7,200

$9,801 to $12,200

$4,901 to $7,200

$9,801 to $12,200

5.00%

Over $7,200

Over $12,200

Over $7,200

Over $12,200

Data source: Oklahoma Tax Commission.

Oregon

Oregon taxes capital gains as income.

Oregon income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

4.75%

Up to $3,600

Up to $7,200

Up to $3,600

Up to $7,200

6.75%

$3,601 to $9,050

$7,201 to $18,100

$3,601 to $9,050

$7,201 to $18,100

8.75%

$9,051 to $125,000

$18,101 to $250,000

$9,051 to $125,000

$18,101 to $250,000

9.90%

Over $125,000

Over $250,000

Over $125,000

Over $250,000

Data source: Oregon Department of Revenue.

Pennsylvania

Pennsylvania taxes capital gains as income. The Pennsylvania state income tax is a flat rate of 3.07%.

Rhode Island

Rhode Island taxes capital gains as income. Tax rates are the same for every filing status.

Rhode Island income and capital gains tax rates

Tax rate

Income

3.75%

Up to $66,200

4.75%

$66,201 to $150,550

5.99%

Over $150,550

Data source: Rhode Island Department of Revenue.

South Carolina

South Carolina taxes capital gains as income. On long-term capital gains, taxpayers are allowed a deduction of 44%.

South Carolina income and capital gains tax rates

Tax rate

Income

0.00%

Up to $3,070

3.00%

$3,071 to $6,150

4.00%

$6,151 to $9,230

5.00%

$9,231 to $12,310

6.00%

$12,311 to $15,400

7.00%

Over $15,400

Data source: South Carolina Department of Revenue.

South Dakota

South Dakota does not tax personal income or capital gains.

Tennessee

Tennessee does not tax personal income or capital gains.

Texas

Texas does not tax personal income or capital gains.

Utah

Utah taxes capital gains as income. The Utah state income tax is a flat rate of 4.95%.

Vermont

Vermont taxes short-term capital gains and long-term capital gains held for up to three years as income. Taxpayers are allowed to exclude up to 40% of capital gains on assets held longer than three years. This exclusion amount is capped at $350,000 and cannot exceed 40% of federal taxable income.

Vermont income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

3.35%

Up to $40,350

Up to $67,450

Up to $33,725

Up to $54,100

6.60%

$40,351 to $97,800

$67,451 to $163,000

$33,726 to $81,500

$54,101 to $139,650

7.60%

$97,801 to $204,000

$163,001 to $248,350

$81,501 to $124,175

$139,651 to $226,200

8.75%

Over $204,000

Over $248,350

Over $124,175

Over $226,200

Data source: Vermont Department of Taxes.

Virginia

Virginia taxes capital gains as income.

Virginia income and capital gains tax rates

Tax rate

Income

2.00%

Up to $3,000

3.00%

$3,001 to $5,000

5.00%

$5,001 to $17,000

5.75%

Over $17,000

Data source: Virginia Department of Taxation.

Washington

Washington doesn't tax personal income or capital gains. There is currently a proposed bill that would tax long-term capital gains earnings above $25,000 for individual filers and above $50,000 for joint filers.

West Virginia

West Virginia taxes capital gains as income.

West Virginia income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

3.00%

Up to $9,999

Up to $9,999

Up to $4,999

Up to $9,999

4.00%

$10,000 to $24,999

$10,000 to $24,999

$5,000 to $12,499

$10,000 to $24,999

4.50%

$25,000 to $39,999

$25,000 to $39,999

$12,500 to $19,999

$25,000 to $39,999

6.00%

$40,000 to $59,999

$40,000 to $59,999

$20,000 to $29,999

$40,000 to $59,999

6.50%

$60,000 or more

$60,000 or more

$30,000 or more

$60,000 or more

Data source: West Virginia State Tax Department.

Wisconsin

Wisconsin taxes capital gains as income. On long-term capital gains, taxpayers are allowed a deduction of 30%, or 60% if the capital gain resulted from the sale of farm assets.

Wisconsin income and capital gains tax rates

Tax rate

Single

Married filing jointly

Married filing separately

Head of household

3.54%

Up to $11,970

Up to $15,960

Up to $7,980

Up to $11,970

4.65%

$11,971 to $23,930

$15,961 to $31,910

$7,981 to $15,960

$11,971 to $23,930

6.27%

$23,931 to $263,480

$31,911 to $351,310

$15,961 to $175,660

$23,931 to $263,480

7.65%

Over $263,480

Over $351,310

Over $175,660

Over $263,480

Data source: Wisconsin Department of Revenue.

Wyoming

Wyoming does not tax personal income or capital gains.

States play a major role in capital gains taxes

The lion's share of taxes, including personal income and capital gains taxes, go to the federal government. But each taxpayer's state also determines how much they owe on their capital gains.

It's important for taxpayers to know the capital gains tax brackets and exclusions in their respective states so they pay the correct amount. If you have investment income or you're planning to sell a capital asset, make sure you understand your state's tax code.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.