What Is the Net Investment Income Tax (NIIT)?
The Net Investment Income Tax is a 3.8% United States federal surtax on investment income for higher earners, created by the Affordable Care Act and reported on IRS Form 8960. It applies on top of ordinary income tax and capital gains tax. This calculator uses the 2024 modified adjusted gross income (MAGI) thresholds and is for U.S. taxpayers only.
How to Use This Calculator
Enter your net investment income (interest, dividends, capital gains, rental and royalty income, and non-qualified annuities, minus related expenses), your modified adjusted gross income (MAGI), and your filing status. The tool returns your estimated 3.8% surtax.
The Formula Explained
The NIIT applies to the smaller of two amounts: your net investment income, or the amount by which your MAGI exceeds the threshold for your filing status.
$$\text{NIIT} = 3.8\% \times \min\!\left(\text{Net Investment Income},\ \text{MAGI} - \text{Threshold}\right)$$
2024 thresholds: Single or Head of Household = $200,000; Married Filing Jointly = $250,000; Married Filing Separately = $125,000. If MAGI is below your threshold, you owe no NIIT.
Worked Example
A married-filing-jointly couple has $50,000 of net investment income and MAGI of $290,000. The excess over the $250,000 threshold is $40,000. The smaller of $50,000 and $40,000 is $40,000. $$\text{NIIT} = 0.038 \times \$40{,}000 = \mathbf{\$1{,}520}$$
FAQ
Who pays the NIIT? Individuals, estates, and trusts whose MAGI exceeds the threshold and who have net investment income.
Does the threshold get indexed for inflation? No — the MAGI thresholds are fixed by statute and have not changed since 2013.
Is wage income subject to NIIT? No. Wages are not investment income, though they count toward MAGI. Wages may instead be subject to the Additional Medicare Tax.
