New York · Capital Loss Deduction
Capital Loss Deduction in New York (2026)
Deduct up to $3,000 of net capital losses against ordinary income per year. New York has a progressive income tax with a top rate of 10.9%, so a New York filer's combined marginal rate on the next dollar at $74,314 of income is about 27.4% (22% federal + 5.4% NY).
2026 savings example for New York
Planning estimate for a single filer earning $74,314 (New York median household income in LevyIO's state dataset) who removes $3,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; NY tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$822
Federal savings
$660
$7,519 → $6,859 · 22% bracket
NY state savings
$162
$3,416 → $3,254 · 5.4% marginal
Combined marginal rate
27.4%
≈ $274 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $3,000.
Federal × New York marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The NY column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | NY marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 5.4% | 15.4% | $154 |
| 12% | $28,500 - $66,500 | 5.4% | 17.4% | $174 |
| 22% | $66,500 - $121,800 | 5.9% | 27.9% | $279 |
| 24% | $121,800 - $217,875 | 5.9% | 29.9% | $299 |
| 32% | $217,875 - $272,325 | 6.85% | 38.85% | $389 |
| 35% | $272,325 - $656,700 | 6.85% | 41.85% | $419 |
| 37% | Over $656,700 | 6.85% | 43.85% | $439 |
Eligibility & forms
Investors with net capital losses
- $3,000 max per year
- Excess carries forward
- Short-term first
Federal forms: Schedule D, Form 8949
New York filing notes
NYC residents face the highest combined rates nationally. The estate tax 'cliff' means losing the entire exemption if your estate exceeds 105% of the threshold. NY aggressively audits departing residents.
Common mistakes: Not tracking carryforward; Wash sale violations.
Frequently asked questions
How much can the Capital Loss Deduction save a New York taxpayer in 2026?
In LevyIO's example, a single filer with $74,314 of income (the New York median household income in our state dataset) who removes $3,000 from taxable income saves about $660 in 2026 federal tax (22% marginal bracket) plus about $162 in New York tax (5.4% state marginal rate), roughly $822 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's NY bracket data, not a survey figure.
What is the New York income tax rate for 2026?
New York has a progressive income tax with a top rate of 10.9%. The NY standard deduction in LevyIO's dataset is $8,000 single / $16,050 married. Top rate 10.9%. NYC adds 3.078-3.876%. Combined up to 14.776%. Estate tax 'cliff' at $6.94M.
Who qualifies for the Capital Loss Deduction in New York?
Investors with net capital losses. The federal rules are the same in every state; the requirements are: $3,000 max per year; Excess carries forward; Short-term first. New York filers should confirm on the NY return whether the state follows the federal treatment.
Which forms do I file to claim the Capital Loss Deduction?
Federal: Schedule D, Form 8949. New York: check the New York State Department of Taxation instructions for the matching state schedule. Common mistakes: Not tracking carryforward; Wash sale violations.
Capital Loss Deduction in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.