Tools · Capital Gains Tax
Alabama Capital Gains Tax Calculator (2026)
Estimate the tax on your capital gains in Alabama for 2026. Enter your gain, holding period, and other income to see federal long- or short-term tax, the 3.8% Net Investment Income Tax, and Alabama’s share, broken out line by line.
Alabama capital gains tax calculator
How to read the rows below: the slice of your gain → the tax on that slice.
- Gain taxed at 0% (long-term)
- $15,550 → $0
- Gain taxed at 15% (long-term)
- $4,450 → −$668
- Federal long-term capital gains tax
- −$668
- Net Investment Income Tax (3.8%)
- $0
- Alabama income tax on gain
- −$1,000
- Total capital gains tax
- $1,668
Alabama taxes capital gains as ordinary income. Alabama has three brackets from 2% to 5%, with the 5% top rate reaching income over $3,000 single ($6,000 married-jointly), so most earners pay close to 5%. The standard deduction and the $1,000 dependent exemption phase down as income rises, and Alabama lets you deduct your federal income tax, which lowers the effective rate.
Some Alabama cities levy a local occupational tax on wages earned in the city (for example Birmingham and Bessemer at 1%, Gadsden at 2%), which is not included here.
Federal: IRS Revenue Procedure 2025-32 (IR-2025-103) · Social Security Administration. State: Alabama Department of Revenue.
Estimate for 2026. Long-term gains are stacked on top of your other taxable income across the 0/15/20% federal breakpoints; short-term gains are taxed as ordinary income. The 3.8% Net Investment Income Tax, an extra federal surtax on investment income, applies once your income clears the threshold. Excludes state credits, the alternative minimum tax, and loss carryovers. This is general information, not tax advice.
How capital gains tax works in Alabama
Long-term gains (assets held more than a year) get the federal 0/15/20% rates — but the rate depends on where the gain lands once it is stacked on top of your other taxable income, so part of a gain can be taxed at 0% and the rest at 15%. Short-term gains are taxed as ordinary income. On top of that, the 3.8% Net Investment Income Tax applies once your income clears $200,000 (single) or $250,000 (married-jointly).
Alabama taxes capital gains as ordinary income, at the same rate as your wages. Alabama has three brackets from 2% to 5%, with the 5% top rate reaching income over $3,000 single ($6,000 married-jointly), so most earners pay close to 5%. The standard deduction and the $1,000 dependent exemption phase down as income rises, and Alabama lets you deduct your federal income tax, which lowers the effective rate.
Local taxes: Some Alabama cities levy a local occupational tax on wages earned in the city (for example Birmingham and Bessemer at 1%, Gadsden at 2%), which is not included here.
This is an annual-bracket estimate, not your final return. It excludes the alternative minimum tax, loss carryovers, and state credits. It is general information, not tax advice. Federal figures: IRS Revenue Procedure 2025-32 (IR-2025-103) · Social Security Administration.
Capital gains calculators for other states
Same 2026 engine, each with its own state rules.