Updated October 4, 2026. Quick answer: Yes. Pennsylvania taxes “net gains or income from the dispositions of property” at the flat personal income tax rate, and the Department says tax is “levied at the rate of 3.07 percent against taxable income”. Gains on a principal residence are excluded for owners who meet the ownership and use rules.
Selling your home? How the state taxes the profit, from its own tax documents: Does Pennsylvania tax the profit from selling your home?.
The same question for dividends and interest: does Pennsylvania tax dividends and interest.
How Pennsylvania treats capital gains
| Item | What the documents say |
|---|---|
| Treatment | Taxed at the flat personal income tax rate; net gains from dispositions of property are one of eight income classes |
| Rate | 3.07 percent (the Department’s current page, which is undated) |
| Principal residence | “capital gains from the sale of a principal residence” are excluded for qualifying owners; the page prints no dollar amount |
| Losses | Gains and losses are not netted across classes and are not carried to other years |
A $50,000 long-term gain
A $50,000 long-term gain is taxed at the flat 3.07 percent, computed as $50,000 x 3.07% = $1,535 of Pennsylvania tax on the gain, before any other income or deduction.
What changes in 2026
The latest document read prints no 2026 change to the way gains are taxed.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.
Related: whether Pennsylvania taxes pensions, how Pennsylvania taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.
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Answer againSources
- Personal Income Tax (Pennsylvania Department of Revenue): https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/personal-income-tax
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.