As with other English homophones, capital and capitol are confusing because their pronunciation is similar and both words when written almost look the same.
To avoid the confusion, let us trace their differences:
Capital has several meanings. As a noun, it may mean “a city that is the seat of the government for a country or a state.”
“Egypt is getting a new capital – courtesy of China”
CNN“Mozambique Renamo Opposition Official Shot Dead in Capital”
Bloomberg“Afghan Officials: Taliban Enter Capital of Helmand Province”
ABC News
In finance, capital refers to “money, equipment, or property that is used in a business.”
“Why Theranos Should Return Its Capital To Investors”
Forbes“Digital Health Entrepreneurs Raising More Capital Than Ever (Probably)”
Forbes“Risky banks face higher capital needs from latest Basel reforms”
Financial Times
As an adjective, capital may denote “an upper case letter.”
“Power of capital letter at the eye of brewing political storm in KS”
KWCH“Rush Limbaugh: Clinton Came Off As “A Witch With A Capital B” During Debate”
Media Matters for America
Capital may also mean “main or principal” as an adjective.
“Housing associations awarded funding for capital projects in Glasgow”
Scottish Housing News“Lake Forest and Lake Bluff schools budget for capital projects”
Chicago Tribune
Meanwhile, capitol may be used to refer to “a building or set of buildings in which a state legislature meets.”
“Fort Worth man broke into Texas Capitol, damaged governor’s portrait, officials say”
Dallas News“Event at Capitol focuses on domestic violence”
The Capital Journal“Veterans visit the nation’s capitol with South Willamette Valley Honor Flight”
KVAL
Capitol may also be used to refer, more specifically, to the U.S. Capitol building located in Washington, D.C. However, it is imperative to use the capital letter “C” when referring to this particular building.
“Texas congressman saves unconscious man’s life at U.S. Capitol”
Dallas News“The scaffolding on the U.S. Capitol is officially gone”
The Washington Post“Police: All Clear After Probe of Suspicious Vehicle Near US Capitol”
Voice of America
It may be useful to remember that you may only use capitol if you are dealing with government buildings. Can you now identify when to use capital or capitol?