Your income pushes the gain. The gain does not push back.

The facts, in one place.

Six quotable sentences on how a gain and ordinary income tax each other, 2026.

1. Ordinary income is taxed first by the brackets, as if the gain did not exist. A long-term gain is then stacked on top and taxed by where it lands: 0 percent up to $49,450 of taxable income on a single return, $66,200 head of household, and $98,900 joint; 15 percent up to $545,500, $579,600, and $613,700; 20 percent above that (26 U.S.C. § 1(h)).
2. So more ordinary income pushes a gain into a higher band, and a gain never pushes ordinary income into a higher bracket. A single filer with $60,000 of ordinary income and a $20,000 gain pays $5,020 on the ordinary income with or without the gain.
3. That is why the next dollar of ordinary income can cost more than the bracket says. The same filer is in the 12 percent bracket, yet one more dollar of wages costs 27 cents: 12 cents of its own tax, and 15 cents because it pushes a dollar of the gain from the 0 percent band into 15.
4. The exception runs through adjusted gross income, which the gain joins in full. For someone drawing Social Security, a gain can make more of the benefit taxable, and the tax on the ordinary income does rise; it also trims the senior deduction and sets the Medicare premium two years later.
5. A gain held a year or less is ordinary income and sits in the brackets with wages. The net investment income tax adds 3.8 percent on gains and dividends once modified adjusted gross income passes $200,000 single or $250,000 joint, thresholds that have not moved since 2013.
6. Illinois taxes a capital gain at its flat 4.95%, the same as a wage, with no lower rate for gains; it does not tax Social Security or withdrawals from retirement accounts at all.

The bands.

The three bands for each status, the surtax threshold, and what Illinois adds.

Which pushes which.

The Code taxes net capital gain as the top slice of taxable income. Everything else is taxed first by the ordinary brackets, and the gain, together with qualified dividends, is taxed by the band its slice lands in. The direction follows from that order: adding ordinary income raises the floor the gain sits on, so the gain climbs into a higher band, while adding gain changes nothing below it. That is why the calculator draws two bars on one scale and leaves the gain off the top one.

The order holds for the brackets but not for adjusted gross income, which the gain joins in full. Three things read that figure: the formula that decides how much of a Social Security benefit is taxable, the phase-out of the deduction for people 65 and older, and the Medicare premium tiers two years out. Through those, and only those, a gain can raise the tax on the income beneath it. The calculator reads both marginal rates by adding a thousand dollars and recomputing the whole return, so every one of those effects shows in the rate rather than hiding in a footnote.

Methodology.

1. Inputs. Ordinary income, qualified dividends, the gain and whether it is long-term, filing status, Social Security benefits, the number of people 65 or older, and whether Illinois applies.
2. The return. The taxable share of Social Security from provisional income, which includes the gain (§ 86); adjusted gross income; the standard deduction with the age additions and the senior deduction after its phase-out; taxable income, with the gain and dividends as its top slice.
3. The two taxes. The ordinary tax from the year's table on the ordinary slice; the gain and dividends across the 0, 15, and 20 percent bands in order; 3.8 percent on the smaller of the investment income and the excess of adjusted gross income over the § 1411 threshold. A short-term gain joins the ordinary slice.
4. The rates. Each marginal rate is the change in federal tax from adding $1,000 to that income, divided by $1,000, with everything else held. Illinois adds its flat rate to the gain's.
5. Validation. Seven pinned cases: the 27 percent on a single filer whose gain straddles the 0 percent band, a joint return with the whole gain at 15 plus the surtax, a short-term gain taxed as ordinary income, a Social Security case where the gain raises the ordinary tax and a twin without benefits where it does not, the head-of-household thresholds, the Illinois rate, and dividends using the 0 percent band first. A transcription error fails the build.
6. Not modeled. Itemized deductions, the child tax credit and its phase-out, collectibles and depreciation recapture, the alternative minimum tax, loss carryforwards, and Illinois on income other than the gain and dividends. Educational, not advice.

Sources.

1. 1. Internal Revenue Service, Rev. Proc. 2025-32 — 2026 inflation adjustments (tax rate tables § 4.01, capital gains § 4.03, AMT exemptions § 4.10). Every 2026 bracket boundary and base amount for individuals (single, head of household, joint) and for estates and trusts; the 0% and 15% capital-gain thresholds; the AMT exemption amounts. Retrieved October 28, 2026; verified October 28, 2026.
2. 2. United States Code (Cornell LII), 26 U.S.C. § 1411 — Imposition of tax (net investment income). The 3.8% surtax; for a trust, the threshold is the dollar amount at which the highest § 1(e) bracket begins; for individuals, $200,000 and $250,000, unindexed. Retrieved September 4, 2026; verified September 4, 2026.
3. 3. United States Code (Cornell LII), 26 U.S.C. § 86(c) — Base amount and adjusted base amount for taxing Social Security benefits. The $25,000 / $32,000 and $34,000 / $44,000 thresholds, which are not indexed. Retrieved September 4, 2026; verified September 4, 2026.
4. 4. Centers for Medicare & Medicaid Services, 2026 Medicare Parts A & B Premiums and Deductibles (fact sheet, November 14, 2025). The Part B standard premium and deductible, the Part A inpatient deductible, and every row of the Part B and Part D income-related adjustment tables. Retrieved September 4, 2026; verified September 4, 2026.
5. 5. Internal Revenue Service, Rev. Proc. 2025-32 — 2026 inflation adjustments (§ 4.14 standard deduction; § 4.42 gift exclusion). The standard deduction amounts, the additional amounts for age or blindness, the $19,000 gift exclusion, and the $194,000 non-citizen-spouse exclusion. Retrieved September 4, 2026; verified September 4, 2026.
6. 6. Internal Revenue Service, One Big Beautiful Bill Act: tax deductions for working Americans and seniors. The $6,000 deduction for individuals 65 and older, its MAGI phase-out thresholds, its 2025-through-2028 window, and its availability to itemizers and non-itemizers. Retrieved September 4, 2026; verified September 4, 2026.
7. 7. Illinois General Assembly, 35 ILCS 5/201(b)(5.4) — Tax imposed; rate for individuals, trusts, and estates. The 4.95 percent rate on net income for taxable years beginning on or after July 1, 2017. Retrieved September 5, 2026; verified September 5, 2026.
8. + United States Code (Cornell LII), 26 U.S.C. § 1(h) — Maximum capital gains rate. That net capital gain is taxed at 0, 15, or 20 percent by reference to the taxable income thresholds, as the top slice above ordinary income.

Revision history.

This tool reads the federal, annual, and Illinois records; their histories are below.

October 28, 2026

Added the head-of-household 0% and 15% capital-gain thresholds ($66,200 and $579,600) from Rev. Proc. 2025-32 § 4.03, for the capital gains rate calculator.

September 5, 2026

First release of the Illinois retirement income tax record and tool: the 4.95 percent rate, the 2026 exemption of $2,925 and the $1,000 addition at 65, and the retirement income subtraction as the statute and Publication 120 state it.

September 5, 2026

Added the senior deduction's phase-out rate (6 percent of MAGI over the threshold), which the widow's penalty and QCD tools apply.

September 4, 2026

First release of the annual numbers record and page for 2026, and of the IRMAA tool built on its Medicare section: plan and IRA limits from Notice 2025-67, HSA figures from Rev. Proc. 2025-19, Social Security figures from the Federal Register notice, Medicare premiums and both income-related tables from the CMS fact sheet, the standard deduction and gift exclusion from Rev. Proc. 2025-32, and the senior deduction from the IRS's OBBBA guidance.

September 4, 2026

First release of the federal income-tax record for 2026 and the trust income-tax tool: the estates-and-trusts table, the single and joint tables for comparison, capital-gain thresholds, AMT exemptions, the § 1411 trust threshold rule, and the § 642(b) exemptions, all from Rev. Proc. 2025-32 and the Code.

Canonical address: https://consideratecapital.com/tools/capital-gains-tax-rate