Virginia Capital Gains Tax (2026)
Virginia capital gains tax rate: Taxed as ordinary income at up to 5.75%
Virginia taxes capital gains as ordinary income. No preferential rate for long-term gains. Northern Virginia residents working in DC may have complex multi-state tax obligations depending on their work location.
Federal Capital Gains Rates Still Apply to Virginia Residents
All Virginia residents also owe federal capital gains tax. Federal long-term capital gains rates are 0% (income up to ~$47,025 single), 15% (income up to ~$518,900 single), or 20% (above). High earners may also owe the 3.8% Net Investment Income Tax (NIIT).
Short-Term vs. Long-Term Capital Gains in Virginia
Assets held less than one year are taxed as ordinary income at federal rates (10%–37%). Assets held over one year qualify for the preferential 0%/15%/20% federal rates. Virginia taxes capital gains as ordinary income. No preferential rate for long-term gains. Northern Virginia residents working in DC may have complex multi-state tax obligations depending on their work location.
Planning Considerations for Virginia Investors
- Tax-loss harvesting can offset gains at both state and federal levels
- Timing asset sales to control income year and bracket placement
- Virginia taxes capital gains at Taxed as ordinary income at up to 5.75% — factor this into net-of-tax return calculations
- Qualified Opportunity Zone investments can defer federal and potentially state gains
Frequently Asked Questions
What is the capital gains tax rate in Virginia?
Virginia taxes capital gains as ordinary income. No preferential rate for long-term gains. Northern Virginia residents working in DC may have complex multi-state tax obligations depending on their work location. Federal rates (0%, 15%, 20% for long-term gains) also apply regardless of state.
Does Virginia have a different rate for long-term vs. short-term capital gains?
Virginia does not distinguish between short- and long-term capital gains — both are taxed as ordinary income at up to 5.75%. Only federal law provides preferential long-term capital gains rates.
How do I reduce capital gains tax in Virginia?
Strategies include: holding assets over one year for federal long-term rates, tax-loss harvesting to offset gains, contributing to retirement accounts (401k, IRA), investing in Qualified Opportunity Zones, and timing sales across tax years. In Virginia, capital gains are taxed at up to Taxed as ordinary income at up to 5.75%, so these strategies reduce both federal and state tax.
Is this capital gains tax calculator free for Virginia?
Yes. Enter your gain amount, holding period, and annual income. The calculator applies both federal rates (0%/15%/20% long-term) and Virginia's Taxed as ordinary income at up to 5.75% state rate to estimate your total tax owed.