Pennsylvania · Capital Loss Deduction
Capital Loss Deduction in Pennsylvania (2026)
Deduct up to $3,000 of net capital losses against ordinary income per year. Pennsylvania has a flat 3.07% income tax, so a Pennsylvania filer's combined marginal rate on the next dollar at $67,587 of income is about 25.07% (22% federal + 3.07% PA).
2026 savings example for Pennsylvania
Planning estimate for a single filer earning $67,587 (Pennsylvania 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; PA tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$561
Federal savings
$469
$6,039 → $5,570 · 22% bracket
PA state savings
$92
$2,075 → $1,983 · 3.07% marginal
Combined marginal rate
25.07%
≈ $251 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $3,000.
Federal × Pennsylvania marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The PA 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) | PA marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 3.07% | 13.07% | $131 |
| 12% | $28,500 - $66,500 | 3.07% | 15.07% | $151 |
| 22% | $66,500 - $121,800 | 3.07% | 25.07% | $251 |
| 24% | $121,800 - $217,875 | 3.07% | 27.07% | $271 |
| 32% | $217,875 - $272,325 | 3.07% | 35.07% | $351 |
| 35% | $272,325 - $656,700 | 3.07% | 38.07% | $381 |
| 37% | Over $656,700 | 3.07% | 40.07% | $401 |
Eligibility & forms
Investors with net capital losses
- $3,000 max per year
- Excess carries forward
- Short-term first
Federal forms: Schedule D, Form 8949
Pennsylvania filing notes
Local taxes can double your burden in cities. PA exempts most retirement income. Inheritance tax applies based on relationship. No deductions are allowed on PA returns.
Common mistakes: Not tracking carryforward; Wash sale violations.
Frequently asked questions
How much can the Capital Loss Deduction save a Pennsylvania taxpayer in 2026?
In LevyIO's example, a single filer with $67,587 of income (the Pennsylvania median household income in our state dataset) who removes $3,000 from taxable income saves about $469 in 2026 federal tax (22% marginal bracket) plus about $92 in Pennsylvania tax (3.07% state marginal rate), roughly $561 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's PA bracket data, not a survey figure.
What is the Pennsylvania income tax rate for 2026?
Pennsylvania has a flat 3.07% income tax. The PA standard deduction in LevyIO's dataset is $0 single / $0 married. Low flat 3.07%. Local taxes (Philadelphia: 3.75%). Inheritance tax (4.5-15%). Most retirement income exempt.
Who qualifies for the Capital Loss Deduction in Pennsylvania?
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. Pennsylvania filers should confirm on the PA return whether the state follows the federal treatment.
Which forms do I file to claim the Capital Loss Deduction?
Federal: Schedule D, Form 8949. Pennsylvania: check the Pennsylvania Department of Revenue 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.