Capital gains and qualified dividends tax rates for 2026
Preferential rates sit on top of ordinary income
Long-term capital gains and qualified dividends are not run through the 10%-through-37% ordinary tables in the same way wages are. They generally use a 0%, 15% or 20% rate, depending on taxable income and filing status. Revenue Procedure 2025-32, section 4.03, publishes the 2026 “maximum zero rate amounts” and “maximum 15 percent rate amounts.” For a single filer (other than a surviving spouse or head of household) those amounts are $49,450 and $545,500. For joint filers and surviving spouses they are $98,900 and $613,700. Heads of household use $66,200 and $579,600. Married filing separately uses $49,450 and $306,850. Estates and trusts have much lower figures in the same table; this site does not compute tax for those entities.
The official method stacks the preferential income on top of ordinary taxable income. In simplified form, you figure ordinary taxable income by subtracting qualified dividends and long-term capital gains from total taxable income, tax that ordinary amount at ordinary rates, then tax the preferential amount at 0%, 15% or 20% according to how much room remains under each official cap. Topic 409 and Publication 550 are the IRS narrative sources for what is a long-term gain, what is a qualified dividend, and how losses and holding periods work. This guide is about the 2026 rate caps, not about whether a particular trade qualifies.
Worked stacking examples
Suppose a single filer has $30,000 of ordinary taxable income and $10,000 of long-term gain. The 2026 zero-rate cap is $49,450, and $30,000 leaves $19,450 of room, so the entire $10,000 is taxed at 0%. Ordinary tax is whatever the 2026 single table produces on $30,000, and the gain adds nothing. Change the ordinary amount to $60,000, which is already above $49,450, and the same $10,000 of gain is taxed at 15%. Ordinary tax is the table tax on $60,000, plus $1,500 on the gain. If ordinary income sat just $450 below the zero cap, $450 of the gain would still be at 0% and the rest at 15%.
The 20% rate applies to preferential income that falls above the maximum 15% amount. For a single filer that cap is $545,500 of the relevant taxable-income measure in the procedure. Most households never reach it. Those who might should use software or a professional, because a separate Net Investment Income Tax can also apply at higher incomes, and this site does not compute that tax. Collectibles and certain other categories can also use a different official rate; they are outside this worksheet.
Short-term gains are ordinary income
A gain on an asset held for one year or less is generally taxed as ordinary income, not at the 0%/15%/20% schedule. Mixing a short-term gain into the qualified-dividend box of a calculator will understate tax. Broker statements usually separate short-term and long-term amounts and identify qualified dividends. If a Form 1099-DIV or 1099-B is unclear, use the form instructions or Publication 550 rather than guessing. Capital losses, including the annual limit on net capital losses against other income, also belong in a complete worksheet; a refund sketch that only adds a positive long-term gain is incomplete if you also had losses.
Retirement-account withdrawals are usually not long-term capital gains, even if the account held stocks. Traditional 401(k) and traditional IRA distributions are generally ordinary income. Roth qualified distributions are generally tax-free. Selling shares in a taxable brokerage account is the typical setting for the preferential rates described here. If you are unsure which account a sale came from, fix that before you use any rate table.
How this changes a refund estimate
Preferential rates can lower the tax on the same total income compared with treating everything as wages, which can raise a refund or cut a balance due. They can also raise AGI and therefore tighten income-based credits, including the EITC investment-income limit of $12,200 for 2026 and the Child Tax Credit phase-out. A gain that is taxed at 0% can still increase AGI. That two-sided effect is why a year-end sale should be tested in a full estimate, not only in a capital-gains rate chart. Our refund calculator applies the 2026 stacking method to the long-term gains and qualified dividends you enter, then applies credits to the resulting tax.
Year-end planning questions — whether to realize a loss, whether a gain will cross a cap, whether a sale is worth making in 2026 versus 2027 — belong with Year-End Moves and with a qualified professional if the amounts are large. This page does not recommend any trade. It restates the official 2026 thresholds and the stacking idea so you can see why a gain is not always taxed at your ordinary marginal rate, and why it is not always tax-free just because you are “under the 0% cap” if your ordinary income has already used that cap up.
Basis, holding period and records
A gain is sale proceeds minus basis, after commissions, and a loss is the opposite, subject to wash-sale and other official limits. If you reinvested dividends over many years and never kept basis, the gain you type into a calculator may be too high. Broker statements for recent years often show adjusted basis; older lots may still need your own records. The IRS publications describe what to do when basis is unknown, and those rules are stricter than “use the current price.” A refund estimate that starts from an inflated gain will overstate tax and understate a refund, or show a bill you do not actually have.
The holding period generally begins the day after you acquire the asset and ends on the day you sell it. The long-term rate schedule applies only when that period is more than one year, with special official rules for some inherited property and some transferred shares. If you sell in early January 2027 a share you bought in January 2026, check the exact dates before you treat the gain as long-term on a 2026 return — a 2027 sale belongs on the 2027 return in any event. Date mistakes are a frequent reason unofficial worksheets disagree with a 1099-B.
When you use the refund calculator, enter only long-term gains and qualified dividends in those boxes, and enter short-term gains as other ordinary income. If net losses exceed gains, do not enter a negative long-term gain and assume the tool will apply the official annual limit against wages; that limit is not modelled as a complete Schedule D. In that situation, use tax software or a preparer, or apply the official loss-limit yourself and only then enter the remaining ordinary income. Preferential rates are a benefit only when you actually have net long-term gain or qualified dividends under the definitions in Publication 550.