QSBS Planning/State Conformity Map
QSBS State Conformity Map
Not all states follow the federal Section 1202 exclusion. Your state determines whether QSBS gains are taxed at the state level — even when fully excluded from federal tax.
California founders: your state taxes QSBS gains at 13.3%
California is one of the most significant non-conforming states. Even if your gain is fully excluded at the federal level, California will tax it at the full state rate. Jurisdiction strategy — establishing trusts in Nevada, South Dakota, or Delaware — is critical for California founders looking to address state-level exposure. Read our California-specific guide
New Jersey update
New Jersey is allowing QSBS exclusions starting January 1, 2026. This is a significant change for NJ-based founders and employees who previously had no state-level relief.
Last updated: March 2026. State tax laws are subject to change.
Related Reading
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