Is 0% Capital-Gains Harvesting Really Free in 2026?

Is harvesting capital gains in the 0% bracket really tax-free for retirees?

Often not. In 10 of the 14 households with Social Security whose $10,000 harvest stayed entirely inside the 0% band, federal tax still rose — by up to 10.2% of the gain — because the gain makes more of the benefit taxable or trims the senior deduction. Before 65 the ACA credit is the bigger risk: 3 of 11 marketplace households lost more credit than the gain itself by crossing 400% of the poverty line. Without Social Security, 4 of 4 Medicare-age households harvested at no federal cost.

Long-term gains are taxed at 0% while taxable income stays inside the 0% capital-gains band, so "harvest gains up to the top of the 0% bracket" is a standard year-end move. It is only free when nothing else depends on income. For a retiree, three things do: the share of Social Security that is taxable (a gain raises provisional income, which can pull up to 85 cents of benefit into ordinary income for each extra dollar), the senior deduction (which phases out with MAGI), and the cliffs priced on MAGI — the ACA premium credit before 65 and the IRMAA surcharge from 65.

Each row harvests $10,000 of long-term gain and compares the computed 2026 tax and benefits with and without it.

"Other federal tax added" is ordinary income tax: the gain itself is taxed at 0% in those rows, but it raises provisional income and MAGI. Where the ACA column is larger than the gain, the household crossed 400% of the federal poverty line, where the 2026 premium credit stops entirely.

ACA figures assume the whole household is on a marketplace plan all year at the engine's Texas age-rated silver benchmark; your own benchmark plan changes the dollars, not the shape. IRMAA uses the 2026 tiers for the 2028 premiums.

See what a gain harvest costs on your own return
Free: your 2026 baseline, one move in full and your combined total.

Download the data

Every row on this page, with its inputs: zero-percent-gain-harvesting-2026.csv · zero-percent-gain-harvesting-2026.json (CC0).

Questions

What is the 0% capital-gains bracket for 2026?

Long-term gains and qualified dividends are taxed at 0% while total taxable income stays under the 0% threshold for the filing status; the engine applies the 2026 thresholds from the IRS revenue procedure.

Why does a 0% gain raise my tax?

The gain itself is taxed at 0%, but it raises provisional income and MAGI, which can make more Social Security taxable at ordinary rates, shrink the senior deduction, reduce an ACA premium credit or push MAGI over an IRMAA tier.

When must the sale happen?

The trade must be made by December 31, 2026 for the gain to count in 2026.

Sources and method

Every figure was computed by QuantCalc's open tax engines — federal 2.0.0 and state 1.12.0, the same engines behind the federal and state tax APIs — for the 2026 tax year. The engine documentation lists the official source of every rule; the rules this study leans on:

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments)
• 26 U.S. Code § 86
• 26 U.S. Code § 151
• Rev. Proc. 2025-25: 2026 applicable percentage table (§36B) and required contribution percentage
• 2026 Medicare Parts A & B Premiums and Deductibles
• 26 U.S. Code § 1411

Federal tax uses the tax rate schedule (the IRS Tax Table, used on returns below $100,000 of taxable income, differs by a few dollars). Households are illustrations, not averages. A joint household's pension, IRA withdrawals and conversion are split evenly between the spouses, so each spouse's own retirement exclusions apply; state tax comes from the state engine through its public API with exactly that split. The full inputs of every row are in the data files, and every row can be re-run through the public APIs.

An estimate, not tax advice. These are computed examples for the 2026 tax year from QuantCalc's open tax engine. Your own return depends on facts these examples do not include. Check any move with your tax preparer or account custodian before acting.

@misc{quantcalc2026is0capitalgainsharvestingreallyfreenotwi,
  title  = {Is 0% Capital-Gains Harvesting Really Free? Not With Social Security, the ACA or IRMAA (2026)},
  author = {{QuantCalc Research}},
  year   = {2026},
  url    = {https://quantcalc.app/research/zero-percent-gain-harvesting-2026/},
  note   = {Accessed <date>}
}