Capital Gains Tax

Capital Gains Tax in New York: Complete Guide 2026

Updated 2026-03-10

Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.

Capital Gains Tax in New York: Complete Guide 2026

Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.

New York taxes capital gains as ordinary income, with state rates reaching 10.90% for the highest earners. For New York City residents, an additional city income tax of up to 3.876% applies, pushing the combined state-plus-city rate to nearly 15%. When added to federal capital gains taxes, New York residents face some of the highest total capital gains tax burdens in the country.

New York Capital Gains Tax Rates (2026)

Like California, New York does not offer a preferential rate for long-term capital gains. All gains are taxed as ordinary income.

Tax RateTaxable Income Range (Single)
4.00%$0 — ~$8,500
4.50%~$8,501 — ~$11,700
5.25%~$11,701 — ~$13,900
5.85%~$13,901 — ~$80,650
6.25%~$80,651 — ~$215,400
6.85%~$215,401 — ~$1,077,550
9.65%~$1,077,551 — ~$5,000,000
10.30%~$5,000,001 — ~$25,000,000
10.90%Over ~$25,000,000

New York City Additional Tax

NYC residents owe an additional city income tax on capital gains:

RateIncome Range
3.078%$0 — ~$12,000
3.762%~$12,001 — ~$25,000
3.819%~$25,001 — ~$50,000
3.876%Over ~$50,000

Combined Rates on Long-Term Gains

ScenarioFederalNY StateNYCNIITCombined
Moderate earner (~$200K)15%~6.25%3.876%*—~25.1%
High earner (~$600K)15%~6.85%3.876%*3.8%~29.5%
Very high earner (~$2M)20%~9.65%3.876%*3.8%~37.3%

NYC tax applies only to NYC residents.

How It Works

No Preferential State Rate

New York follows the federal definition of capital gains but does not apply the federal preferential rate. All capital gains are stacked on top of your other income and taxed at your marginal state rate. For a New York City resident with $2 million in long-term gains, the combined federal, state, city, and NIIT rate approaches 37%.

Primary Residence Exclusion

New York conforms to the federal exclusion of up to $250,000 (single) or $500,000 (MFJ) in gain from the sale of a primary residence. Given NYC real estate prices, many sellers have gains exceeding these thresholds. A co-op or condo purchased for $600,000 and sold for $1.5 million generates $900,000 in gain — $400,000 of which would be taxable after the exclusion (for a single filer).

Nonresident Taxation

New York taxes nonresidents on capital gains derived from New York sources. This includes gains from the sale of real property located in New York and gains from a business, trade, or profession carried on in New York. It does not include gains from stocks or securities held by a nonresident (unless the nonresident’s tax home is New York).

Qualified Small Business Stock (Section 1202)

New York does not conform to the federal Section 1202 exclusion for qualified small business stock (QSBS). While you may exclude up to 100% of gain federally on qualifying QSBS, New York taxes the full gain as ordinary income. This is a significant consideration for startup founders and early-stage investors.

Comparison to National Average

MetricNew York (State)New York (State + NYC)Typical State
Top capital gains rate10.90%~14.78%~0%—5%
Preferential long-term rateNoneNoneMost follow federal
QSBS conformityNoNoMost states conform

New York’s treatment of capital gains is among the most aggressive in the nation, particularly for NYC residents who face the additional city tax.

Tips for Minimizing New York Capital Gains Tax

  1. Maximize the primary residence exclusion. Ensure you meet the two-out-of-five-year test. For NYC co-op and condo sales, this exclusion is often the largest single tax benefit available.
  2. Harvest losses aggressively. New York conforms to federal loss harvesting rules. Offset gains with losses and deduct up to $3,000 in net losses against ordinary income.
  3. Consider residency planning. Moving to a no-income-tax state before realizing large gains is a strategy used by many New Yorkers. However, New York’s residency audit program is aggressive — you must demonstrate a genuine change of domicile and pass the 548-day safe harbor test (spending fewer than 183 days in New York in the tax year and maintaining no permanent place of abode).
  4. Use retirement accounts for investments. Gains within 401(k)s, IRAs, and Roth accounts are not subject to New York capital gains tax until distribution (or never for Roth).
  5. Structure business sales carefully. The lack of QSBS conformity means startup founders selling a business should consult a tax professional about entity structure, installment sales, and other strategies to manage the New York tax obligation.
  6. Donate appreciated assets to charity. Avoid capital gains tax on the appreciation and receive a fair market value deduction at both the federal and New York state level.

Key Takeaways

  • New York taxes capital gains as ordinary income at rates up to 10.90% (plus 3.876% for NYC residents)
  • There is no preferential rate for long-term gains at the state or city level
  • New York does not conform to the federal QSBS exclusion, affecting startup founders and investors
  • The combined federal, state, city, and NIIT rate can approach 37% on long-term gains for high earners in NYC
  • Primary residence exclusion and loss harvesting are the primary tools for managing the tax burden
  • Residency changes require careful planning due to New York’s aggressive audit program

Next Steps