Capital is the city or the money. Capitol is the building. The capital of the state. The dome on the capitol. Diction as a set is in word choice.
City versus building
If you can swap in city or funds, use capital. If you can swap in legislature building, use capitol. The usual miss is capitol city.
Desert versus dessert is another look-alike pair, in desert versus dessert. Accept versus except is in accept versus except. Grammar overall is in ACT grammar rules.
The bottom line
City or money: capital. Building: capitol.
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