Nj long term capital gains tax rate

While federal tax rates apply to every taxpayer, state income taxes vary by state. Some states have a flat tax rate, marginal tax rate, or don’t have any state taxes at all. New Jersey operates as a progressive tax system, meaning the rate goes up or down based on your adjusted gross income.

What Are the NJ Tax Brackets?

The NJ tax brackets vary between 1.4% and 10.75%, depending on your filing status and adjusted gross income. The tax brackets are as follows:

• 4%
• 75%
• 45%
• 5%
• 25%
• 37%
• 97%
• 75%

This applies to the following filing statuses:

• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household

Reference tax rate tables for the New Jersey tax rates from the New Jersey Department of Taxation.

Single Filing Status:

Married Filing Status:

Head of Household:

For the Married Filing Jointly and Head of Household filing statuses, an eighth tax rate and income tax bracket appears.

More Help With New Jersey Taxes

Don’t want to prepare your state taxes solo? We can help with H&R Block Virtual! With this service, we’ll match you with a tax pro with New Jersey tax expertise. Then, you will upload your tax documents, and our tax pros will do the rest! We can help with your NJ taxes, including federal deductions for paying state taxes.

Prefer a different way to file? No problem – you can find New Jersey state tax expertise with all of our ways to file taxes.

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Investors must pay capital gains taxes on the income they make as a profit from selling investments or assets. The federal government taxes long-term capital gains at the rates of 0%, 15% and 20%, depending on filing status and income. And short-term capital gains are taxed as ordinary income. Some states will also tax capital gains.

A financial advisor could help you figure out your tax liability and create a tax plan to maximize your investments.

An Overview of Capital Gains Taxes

Capital gains vary depending on how long an investor had owned the asset before selling it. Long-term capital gains come from assets held for over a year. Short-term capital gains come from assets held for under a year.

Based on filing status and taxable income, long-term capital gains for tax year 2022 will be taxed at 0%, 15% and 20%. Short-term gains are taxed as ordinary income based on your personal income tax bracket. After federal capital gains taxes are reported through IRS Form 1040, state taxes may also be applicable.

States That Don’t Tax Capital Gains

The following states do not tax capital gains:

• Alaska

• Florida

• New Hampshire

• Nevada

• South Dakota

• Tennessee

• Texas

• Wyoming

This is because many of these states do not have an income tax. New Hampshire specifically taxes investment income (including interest and dividends from investments) only, but not wages.

States That Tax Capital Gains

A majority of U.S. states have an additional capital gains tax rate between 2.9% and 13.3%. The rates listed below are for 2022, which are taxes you’ll file in 2023.

States With the Highest Capital Gains Tax Rates

The states with the highest capital gains tax are as follows:

California

California taxes capital gains as ordinary income. The highest rate reaches 13.3%

Hawaii

Hawaii taxes capital gains at a lower rate than ordinary income. The highest rate reaches 7.25%.

Iowa

Taxes capital gains as income and the rate reaches 8.53%.

Maine

Taxes capital gains as income. The rate reaches 7.15% at maximum.

Story continues

Minnesota

Taxes capital gains as income and the rate reaches a maximum of 9.85%.

New Jersey

New Jersey taxes capital gains as income and the rate reaches 10.75%.

New York

New York taxes capital gains as income and the rate reaches 8.82%.

Oregon

Oregon taxes capital gains as income and the rate reaches 9.9%.

Vermont

Vermont taxes short-term capital gains as income, as well as long-term capital gains that a taxpayer holds for up to three years. They are allowed to deduct up to 40% of capital gains (at a maximum of $350,000 and not exceeding 40% of federal taxable income) on long-term assets held over three years. The capital gains tax rate reaches 8.75%.

Wisconsin

Wisconsin taxes capital gains as income. Long-term capital gains can apply a deduction of 30% (or 60% for capital gains from the sale of farm assets). The capital gains tax rate reaches 7.65%.

Capital Gains Tax Rates in Other States

Capital Gains Tax Rates by State

As for the other states, capital gains tax rates are as follows:

Alabama

Taxes capital gains as income and the rate reaches 5%

Arizona

Taxes capital gains as income and the rate reaches 4.5%

Arkansas

Taxes capital gains as income and the rate reaches around 5.50%.

Colorado

Colorado taxes capital gains as income and the rate reaches 4.55%.

Connecticut

Connecticut’s capital gains tax is 6.99%.

Delaware

Taxes capital gains as income and the rate reaches 6.60%.

Georgia

Taxes capital gains as income and the rate reaches 5.75%.

Idaho

Idaho axes capital gains as income. The rate reaches 6.93%.

Illinois

Taxes capital gains as income and the rate is a flat rate of 4.95%.

Indiana

Taxes capital gains as income and the rate is a flat rate of 3.23%.

Kansas

Kansas taxes capital gains as income. The rate reaches 5.70% at maximum.

Kentucky

Taxes capital gains as income. The rate is a flat rate of 5%.

Louisiana

Taxes capital gains as income. The rate reaches 4.25%.

Maryland

Taxes capital gains as income and the rate reaches 5.75%.

Massachusetts

Taxes capital gains as income. Long-term capital gains are usually taxed at a flat rate of about 5% but there are some types of capital gains that the state taxes at 12%.

Michigan

Taxed as income and at a flat rate of 4.25%.

Mississippi

Taxed as income and reaches 5%.

Missouri

Taxed as income and the rate reaches 5.4%.

Montana

Taxed as income and the highest income tax rate is 6.90%, but with a 2% capital gains credit, this rate is technically 4.9%.

Nebraska

Taxed as income and the rate reaches 6.84%.

New Mexico

The state taxes capital gains as income (allowing a deduction of 40% of capital gains income or $1,000, whichever is higher) and the rate reaches 5.9%.

North Carolina

Taxed as income and at a flat rate of 4.99%.

North Dakota

Taxed as income (with a deduction allowed of 40% of capital gains income) and the rate reaches 2.90%.

Ohio

Taxed as income and the rate reaches 4.80%.

Oklahoma

Taxed as capital gains and the rate reaches 4.75%. There is a 100% capital gains deduction available for income from particular kinds of investments.

Pennsylvania

Taxed as capital gains income at a flat rate of 3.07%.

Rhode Island

Taxed as capital gains income and reaching 5.99%.

South Carolina

South Carolina taxes capital gains as income (with a 44% deduction available on long-term gains) and the rate reaches 7%.

Utah

Taxes capital gains as income at a flat rate of 4.95%.

Virginia

Virginia taxes capital gains as income with the rate reaching 5.75%.

Washington

Washington State taxes capital gains at a rate of 7%. However, real estate, retirement savings, livestock and timber are exempt from this tax.

West Virginia

The state taxes capital gains as income. The rate reaches 6.5%.

Bottom Line

Capital gains taxes can be tricky when investing, especially when you have to figure out both federal and state taxes. Be sure to understand whether your state taxes capital gains – and to what extent – before filing your tax return.

Tips for Navigating Tax Planning

Capital Gains Tax Rates by State

• Need help finding a financial advisor? Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

• You might be interested in signing up for a robo-advisor. Many robo-advisors offer tax-loss harvesting, which sells investments that are hurting your portfolio and helps offset what you earn from the gains. Robo-advisors aren’t necessarily right for everyone, but if you’re starting your investment journey or you don’t have complicated assets, you may want to give it a try. If you’re unsure, find one that offers you the chance to talk to a financial professional if you have questions about your specific needs. Not all robo-advisors offer this perk, but some do, usually for a fee.

  Do you pay state tax on capital gains in NJ?

  If you are a New Jersey resident, all of your capital gains, except gains from the sale of exempt obligations, are subject to tax. When you calculate the gain or loss from each transaction, you can deduct expenses of the sale and your basis in the property.

  What is the long

  If you have a long-term capital gain – meaning you held the asset for more than a year – you'll owe either 0 percent, 15 percent or 20 percent in the 2022 or 2023 tax year.

  What is capital gains tax in Jersey?

  Capital gains are not subject to tax in Jersey.

  How much is capital gains tax on real estate in NJ?

  For the state level, New Jersey taxes capital gains as ordinary income, with rates ranging from 1.4% to 10.75%.