United States · IRS tax
Net investment income tax (NIIT).
Estimate the 3.8% surtax on investment income for individuals, based on your filing status, net investment income and MAGI.
The NIIT is 3.8% of the lesser of your net investment income or the amount your MAGI is over $200,000 (single or head of household), $250,000 (married filing jointly or qualifying surviving spouse) or $125,000 (married filing separately).
Your inputs
Estimate
How the NIIT is calculated
NIIT = 3.8% × the smaller of (1) your net investment income and (2) your MAGI minus the threshold for your filing status, never below zero. The thresholds are set in the statute and are not adjusted for inflation.
Worked example
Single filer, MAGI $280,000, net investment income $60,000. MAGI is $80,000 over the $200,000 threshold. The lesser of $60,000 and $80,000 is $60,000. $60,000 × 3.8% = $2,280.
Same single filer with $150,000 of net investment income: the lesser of $150,000 and $80,000 is $80,000, so the tax is $80,000 × 3.8% = $3,040. Wages are not taxed by the NIIT, only the investment income that sits above the threshold.
What counts as net investment income
- Interest, dividends, certain annuities, royalties and rents (unless earned in a trade or business the NIIT does not reach).
- Income from a trade or business that is a passive activity, or that trades in financial instruments or commodities.
- Net gains from selling property such as stocks, bonds, mutual funds and real estate, to the extent included in taxable income (other than property held in a business the NIIT does not reach).
- Generally, net gains from selling an active partnership or S corporation interest.
What does not count
- Wages, unemployment compensation and income from an active business.
- Tax-exempt state or municipal bond interest and Veterans Administration benefits.
- The part of a principal-residence sale gain that is excluded from regular income tax.
FAQ
Do estates and trusts pay it? Yes, on a different formula (undistributed net investment income over the point where the top bracket starts). This page covers individuals only.
Where is it reported? Compute it on Form 8960 and report it on Form 1040 or 1040-SR.
Does it replace regular income tax on the gain? No. It is an additional tax on top of regular tax. You may need to raise withholding or estimated payments to cover it.
Why is MAGI sometimes more than AGI? For the NIIT, MAGI is AGI plus the foreign earned income exclusion (net of related deductions).
Official sources: IRS Topic no. 559, Net investment income tax and 26 U.S.C. 1411. Rules and thresholds verified October 1, 2026.
Estimate only
This page is educational and is not tax advice. Determining net investment income involves deductions and exceptions this simple estimate does not model. Confirm with Form 8960 and its instructions or a qualified tax professional.