QSBS State Tax Calculator
Estimate state tax on stock-sale gain, compare states, and understand the assumptions behind the numbers.
Federal rules as of July 4, 2025
OBBBA changed the clock and the cap — not the rest of §1202
Stock acquired on or before July 4, 2025 must be held for more than five years. Later acquisitions use at least three, four, or five years for 50%, 75%, or 100% exclusion. The eligible-gain limit generally uses remaining dollar capacity ($10M for older stock, $15M for newer stock) or ten times qualifying basis, whichever is greater. The $75M gross-asset threshold applies to stock issued after July 4, 2025; earlier issuances use $50M. The new dollar amounts are indexed after 2026. Read the rules and effective dates.
JCT scores the expansion as a small near-term revenue gain through 2028, then −$17.2B over 2025–34 (JCX-35-25). That is a stock-and-flow number, not a $42 billion annual giveaway.
This comparison assumes the shares qualify for QSBS and satisfy the relevant holding period. Enter gain after subtracting tax basis, not the total sale proceeds or option-exercise compensation. Read the model assumptions before using an estimate.
Sale proceeds minus tax basis.
2027+ applies the modeled RI change; future inflation and other law changes are not projected.
Assumes unused dollar-limit capacity and all eligibility requirements met. Uses simplified rates; federal tax, local tax, and the 10× basis alternative are not calculated.
Hypothetical holding-period comparison: stock newly acquired after July 4, 2025 cannot reach three years until 2028, four until 2029, or five until 2030. The tax-year selector applies modeled state rules; it does not validate acquisition and sale dates. Special carryover rules need separate review.
Modeled state tax on this gain in Alabama
$141
Never conformed
Compare key states on the same gain
| State | Model Rate | QSBS Status | Modeled Tax |
|---|---|---|---|
| Texas | 0% | No income tax | $0 |
| Florida | 0% | No income tax | $0 |
| Washington | 7% | conforms | $0 |
| California | 13.3% | decoupled | $374 |
| Oregon | 9.9% | decoupled | $278 |
| New York | 10.9% | conforms | $0 |
How this QSBS calculator works
This is a state-tax comparison, not a calculation of your total tax bill. Enter your gain: sale proceeds minus adjusted tax basis. For example, $1.2 million of proceeds less $200,000 of basis means entering $1 million.
For a fully conforming state, the general model is: (gain − modeled exclusion) × model rate. The modeled exclusion is the selected percentage times the lesser of gain or the base dollar cap. For a fully decoupled state, the general model applies the rate to the whole gain. State-specific branches can change that calculation.
What the estimate assumes and omits
- Shares already satisfy the QSBS requirements. Older shares satisfy the more-than-five-year holding rule. The tool does not test the company, original issuance, redemptions, or acquisition-date carryover.
- The model assumes full unused $10M or $15M dollar capacity. It does not apply the 10× basis alternative, earlier sales from the same issuer, mixed acquisition lots, separate-return limits, or inflation adjustments. Read the exclusion limits guide.
- Rates are simplified comparison rates, generally top state marginal rates applied to the modeled taxable gain. Progressive brackets, other income, deductions, credits, local taxes, and most surtaxes are omitted. A top-rate estimate is not your effective tax rate.
- Federal capital-gains tax, net investment income tax, AMT, option-exercise compensation, and Section 1045 rollover elections are not calculated.
- Massachusetts uses a modeled 5% rate on the remainder and omits its 4% surtax. Vermont, Hawaii, Maine, and Rhode Island use special model branches. Washington's displayed 7% rate is a simplified model, not a complete computation of its capital-gains tax.
- State selection does not establish residency or where income is sourced. Changing the selection is a comparison, not evidence that moving eliminates tax. See moving before a stock sale.
A $0 result means zero under these assumptions. It does not establish that no tax is owed. The 2027+ selector applies the modeled Rhode Island change; it does not forecast every future state's rules.
Worked examples you can load
These examples assume qualifying shares acquired September 28, 2010 through July 4, 2025, held more than five years, a 2026 sale, and unused dollar-limit capacity. Dollar amounts are rounded to the nearest dollar.
$1 million gain: California and New York
At California's model rate of 13.3%, the calculation is $1,000,000 × 13.3% = $133,000, because the model allows no state QSBS exclusion. For New York, a fully excluded $1 million gain produces $0 in this model. These are simplified state comparisons, not individual tax bills.
Load the $1M California example · Load the $1M New York example
$12 million gain: the base dollar cap matters
Using New York's 10.9% model rate and the assumed $10 million cap, $12 million − $10 million leaves $2 million taxable. The modeled tax is $218,000. An available 10× basis alternative could change this outcome; the calculator does not model it.
Documents to gather before relying on QSBS
Bring stock purchase or exercise records, acquisition dates, basis records, issuer eligibility documentation, and records of prior sales from the same issuer to your tax adviser. Separate option compensation from later stock-sale gain. The employee stock options guide explains that distinction; the eligibility guide provides the broader checklist.
Sources and methodology
Federal requirements: 26 USC §1202. California rate reference: FTB Form 540 instructions and rate schedules. State treatment and underlying citations: state conformity map, California, New York, and Oregon. The calculation code and state dataset show precisely what this model implements.