Mississippi’s 4% rate above $10,000
Mississippi taxes no income up to $10,000 of taxable income and 4% above it for 2026, with 3.75% already scheduled for 2027. A capital gain is ordinary income here, so a single resident moving from $60,000 to $110,000 of Mississippi taxable income owes $2,000 more, exactly 4% of the difference.
Mississippi does exempt one kind of gain outright: gains from selling an interest in a qualifying Mississippi-domiciled business entity held more than a year, under conditions in the statute, along with related loss limits. Shares of a public company do not qualify. Married couples filing a combined return compute each spouse separately, and when one spouse has a negative balance the two are netted under one threshold.
Mississippi combined-spouse taxable-income netting
Mississippi’s current agency table sets the 2026 rate at 4% of taxable income above $10,000. The published 2027 rate is 3.75%, which is not substituted into this 2026 comparison. A single approved taxable balance of $20,000 gives $400 before usable credits. The threshold applies to the actual taxable base after state adjustments, deductions and exemptions.
Combined spouse returns need special handling. When both taxable balances are positive, tax is computed separately on each. When one is negative and the other positive, the actual instructions require netting the two and applying one $10,000 threshold. Approved balances of $23,000 and negative $3,000 therefore give $400, not the $520 obtained by discarding the negative spouse balance.
Keep signed spouse taxable amounts when preparing a combined return. Transaction-specific exemptions for qualifying domestic-entity dispositions require their actual conditions and related loss restrictions; they are not an exemption for every Mississippi investment. Supply approved annual bases and usable nonrefundable credits for both scenarios. Refundable pass-through credits, payments, residency allocation and unsupported other effects require entered final liabilities.
Mississippi preparation checklist
- Signed spouse bases; net both when one spouse balance is negative
- Both-positive columns use separate thresholds
- Ordinary credits exclude refundable payments