Net Investment Income Tax Calculator
On $65,000 of net investment income above the Form 8960 threshold, a single filer owes $2,470 of NIIT.
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Your Form 8960 tax
Net Investment Income Tax (Line 17)
$2,470.00
Which Amount Sets the Tax
Net investment income is the smaller amount, so all of it is taxed
For a single filer at $300,000 MAGI, Form 8960 line 12 NII is $65,000 ($70,000 income minus $5,000 deductions).
Under 26 U.S.C. § 1411(a)(1), the tax hits the smaller of $65,000 (line 12) or $100,000 over the $200,000 floor (line 15).
Line 16 taxes $65,000 at 0.038 for $2,470 of NIIT on line 17 (3.80% of NII, leaving $0 untaxed).
Your filing status, income and investment deductions
- Line 12 NII = max($0, $70,000 − $5,000) = $65,000
- Line 15 over threshold = max($0, $300,000 − $200,000) = $100,000
- Line 16 taxed = min($65,000, $100,000) = $65,000
- Line 17 NIIT = $65,000 × 0.038 = $2,470.00
Form 8960 NIIT Across Modified AGI Levels
NIIT by Filing Status at Your Income
Tax at different modified AGI
Across the 8 modified AGI levels from $180,000 to $400,000, Form 8960 line 17 NIIT runs from $0 to $2,470.
| Modified AGI | Over the threshold | Amount taxed | Tax |
|---|---|---|---|
| $180,000 | $0.00 | $0.00 | $0.00 |
| $200,000 | $0.00 | $0.00 | $0.00 |
| $220,000 | $20,000.00 | $20,000.00 | $760.00 |
| $240,000 | $40,000.00 | $40,000.00 | $1,520.00 |
| $260,000 | $60,000.00 | $60,000.00 | $2,280.00 |
| $280,000 | $80,000.00 | $65,000.00 | $2,470.00 |
| $300,000 (closest to your input) | $100,000.00 | $65,000.00 | $2,470.00 |
| $400,000 | $200,000.00 | $65,000.00 | $2,470.00 |
Tax by modified AGI (rows) and net gain from property sales (columns).
| Modified Adjusted Gross Income by net gain or loss from property sales | $0 | $15,000 | $30,000 | $60,000 | $120,000 |
|---|---|---|---|---|---|
| $180,000 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| $200,000 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| $220,000 | $760.00 | $760.00 | $760.00 | $760.00 | $760.00 |
| $240,000 | $1,330.00 | $1,520.00 | $1,520.00 | $1,520.00 | $1,520.00 |
| $260,000 | $1,330.00 | $1,900.00 | $2,280.00 | $2,280.00 | $2,280.00 |
| $280,000 | $1,330.00 | $1,900.00 | $2,470.00 | $3,040.00 | $3,040.00 |
| $300,000 (closest to your input) | $1,330.00 | $1,900.00 | $2,470.00 | $3,610.00 | $3,800.00 |
| $400,000 | $1,330.00 | $1,900.00 | $2,470.00 | $3,610.00 | $5,890.00 |
Tax at different net gains
Across net property gains from −$3,000 to $250,000, net investment income moves from $32,000 to $285,000 and Form 8960 line 17 NIIT moves from $1,216 to $3,800.
| Net gain or loss | Net investment income | Amount taxed | Tax |
|---|---|---|---|
| -$3,000 | $32,000.00 | $32,000.00 | $1,216.00 |
| $0 | $35,000.00 | $35,000.00 | $1,330.00 |
| $15,000 | $50,000.00 | $50,000.00 | $1,900.00 |
| $30,000 (closest to your input) | $65,000.00 | $65,000.00 | $2,470.00 |
| $50,000 | $85,000.00 | $85,000.00 | $3,230.00 |
| $65,000 | $100,000.00 | $100,000.00 | $3,800.00 |
| $100,000 | $135,000.00 | $100,000.00 | $3,800.00 |
| $250,000 | $285,000.00 | $100,000.00 | $3,800.00 |
Form 8960 Line-by-Line Computation (Parts I–III)
| Form 8960 Line | Item Description | Amount | Form 8960 Rule |
|---|---|---|---|
| Line 1 | Taxable interest | $4,000.00 | Part I: 26 U.S.C. § 1411(c)(1)(A)(i); excludes tax-exempt interest |
| Line 2 | Ordinary dividends | $12,000.00 | Part I: includes qualified and ordinary dividends |
| Line 3 | Annuities | $0.00 | Part I: nonqualified taxable annuities (§ 1411(c)(5) excludes qualified plans) |
| Line 4c | Passive rental, royalty, and pass-through income | $24,000.00 | Part I: line 4a rents, royalties and passive or trading income, adjusted by line 4b (§ 1411(c)(2)) |
| Line 5d | Net gain or loss from disposition of property | $30,000.00 | Part I: lines 5a–5c taxable net capital gain or allowable loss |
| Line 8 | Total investment income | $70,000.00 | Part I: sum of lines 1, 2, 3, 4c, and 5d |
| Line 9a | Investment interest expenses | $2,000.00 | Part II: Schedule A line 9 / Form 4952 (after § 68 limit for 2026) |
| Line 9b | State, local, and foreign income and property taxes | $3,000.00 | Part II: allocable share of Schedule A taxes after § 164(b)(6) cap |
| Lines 9c & 10 | Other allowable deductions and modifications | $0.00 | Part II: properly allocable deductions (§ 1411(c)(1)(B)); excludes advisory fees |
| Line 11 | Total deductions and modifications | $5,000.00 | Part II: sum of lines 9a, 9b, 9c, and 10 |
| Line 12 | Net investment income (NII) | $65,000.00 | Part III: max($0, line 8 − line 11) ("If zero or less, enter -0-") |
| Line 13 | Modified adjusted gross income (MAGI) | $300,000.00 | Part III: Form 1040 AGI + net Form 2555 foreign earned income (§ 1411(d)) |
| Line 14 | Threshold based on filing status (Single) | $200,000.00 | Part III: 26 U.S.C. § 1411(b) unindexed threshold |
| Line 15 | MAGI over threshold | $100,000.00 | Part III: max($0, line 13 − line 14) ("If zero or less, enter -0-") |
| Line 16 | Smaller of line 12 or line 15 (amount taxed) | $65,000.00 | Part III: min(line 12, line 15) (§ 1411(a)(1) lesser-of base) |
| Line 17 | Net investment income tax for individuals | $2,470.00 | Part III: line 16 × 0.038, transferred to Schedule 2 (Form 1040) |
Form 8960 Parts I–III for Single at $300,000 MAGI: line 8 gross investment income is $70,000, line 11 deductions are $5,000, line 12 NII is $65,000, line 15 excess MAGI is $100,000, and line 17 NIIT is $2,470.
Net Investment Income Tax Across Filing Statuses
| Filing Status | Threshold (Line 14) | MAGI Over Threshold (Line 15) | Amount Taxed (Line 16) | NIIT (Line 17) | Share of NII |
|---|---|---|---|---|---|
| Single | $200,000.00 | $100,000.00 | $65,000.00 | $2,470.00 | 3.80% |
| Joint | $250,000.00 | $50,000.00 | $50,000.00 | $1,900.00 | 2.92% |
| Separate | $125,000.00 | $175,000.00 | $65,000.00 | $2,470.00 | 3.80% |
| Head | $200,000.00 | $100,000.00 | $65,000.00 | $2,470.00 | 3.80% |
| Surviving | $250,000.00 | $50,000.00 | $50,000.00 | $1,900.00 | 2.92% |
At $300,000 MAGI and $65,000 NII, Form 8960 line 17 NIIT is $2,470 for Single ($200,000 threshold), $1,900 for Married Filing Jointly ($250,000 threshold), and $2,470 for Married Filing Separately ($125,000 threshold).
Net Investment Income Tax Across Modified AGI Levels
| Modified AGI (Line 13) | Over Threshold (Line 15) | Net Investment Income (Line 12) | Amount Taxed (Line 16) | NIIT (Line 17) |
|---|---|---|---|---|
| $125,000.00 | $0.00 | $65,000.00 | $0.00 | $0.00 |
| $150,000.00 | $0.00 | $65,000.00 | $0.00 | $0.00 |
| $180,000.00 | $0.00 | $65,000.00 | $0.00 | $0.00 |
| $200,000.00 | $0.00 | $65,000.00 | $0.00 | $0.00 |
| $220,000.00 | $20,000.00 | $65,000.00 | $20,000.00 | $760.00 |
| $240,000.00 | $40,000.00 | $65,000.00 | $40,000.00 | $1,520.00 |
| $250,000.00 | $50,000.00 | $65,000.00 | $50,000.00 | $1,900.00 |
| $265,000.00 | $65,000.00 | $65,000.00 | $65,000.00 | $2,470.00 |
| $280,000.00 | $80,000.00 | $65,000.00 | $65,000.00 | $2,470.00 |
| $300,000.00 | $100,000.00 | $65,000.00 | $65,000.00 | $2,470.00 |
| $350,000.00 | $150,000.00 | $65,000.00 | $65,000.00 | $2,470.00 |
| $400,000.00 | $200,000.00 | $65,000.00 | $65,000.00 | $2,470.00 |
Holding net investment income at $65,000 (Single, $200,000 threshold), line 17 NIIT is $0 up to $200,000 of MAGI, rises by $38 per $1,000 of MAGI above $200,000, and caps at $2,470 once MAGI reaches $265,000.
How it works
Under 26 U.S.C. § 1411(a)(1), the Net Investment Income Tax (NIIT) is a 3.8% tax on individuals with high income. You owe it only when your modified adjusted gross income (MAGI) tops the statutory threshold in section 1411(b). That threshold is $200,000 for single and head of household filers, $250,000 for joint and surviving-spouse returns, and $125,000 for married filing separately. Those dollar floors are not indexed for inflation and stay the same for 2025 and 2026. You figure the tax on IRS Form 8960 and add line 17 to Schedule 2 (Form 1040). It sits on top of the regular tax from the federal income tax calculator.
Part I of Form 8960 (lines 1 to 8) adds up your gross investment income under 26 U.S.C. § 1411(c)(1)(A) and 26 CFR § 1.1411-4. It counts taxable interest, dividends, nonqualified annuities, passive rents and royalties, trading income, and net gains from selling property. Part II (lines 9a to 11) subtracts allowable deductions under § 1411(c)(1)(B) to reach net investment income (NII) on line 12. If your deductions match or beat your income, Form 8960 line 12 tells you: "If zero or less, enter -0-".
Part III (lines 13 to 17) compares line 12 against line 15, which is your MAGI minus your threshold. Under § 1411(a)(1), you pay 3.8% on the smaller of line 12 or line 15. With mostly wages, NII is smaller, so all of your NII is taxed at 3.8%. With mostly investment income, the MAGI over the threshold is smaller, so only that part is taxed. To check a single asset sale at the 0%, 15%, and 20% rates, use the capital gains tax calculator. For a rental sale, use the rental property sale tax calculator.
The deductions on lines 9a and 9b count only if you itemize on Schedule A. They cover investment interest on Form 4952 and the share of state and local taxes tied to your investment income. Advisory fees do not count because P.L. 119-21 ended miscellaneous itemized deductions. From 2026, the 26 U.S.C. § 68 limit applies to investment interest too. Enter your deductions after that limit.
What Counts in Form 8960 Part I (and What Stays Out)
Under 26 U.S.C. § 1411(c)(1)(A) and 26 CFR § 1.1411-4(a), Part I puts gross investment income into three buckets. Bucket one (lines 1 to 3) holds interest, dividends, and annuities. Bucket two (line 4a) holds rents, royalties, and passive income under section 469 or trading income under section 475(e)(2) from partnerships, S corporations, and trusts, with line 4b adjusting for a non-section 1411 business. Bucket three (lines 5a to 5d) holds net gains from selling non-business property.
Several pay sources stay off Form 8960 under 26 U.S.C. § 1411(c). Wages and tips never count in Part I. High wage earners may instead owe the 0.9% payroll tax in the Additional Medicare Tax calculator. Self-employment pay taxed under section 1401(b) is left out by § 1411(c)(6). Tax-exempt municipal bond interest, Social Security, jobless pay, and life-insurance payouts also stay out.
Under 26 U.S.C. § 1411(c)(5), payouts from retirement plans and IRAs are never net investment income. That rule covers 401(k), 403(a), 403(b), 457(b), traditional IRA (section 408), and Roth IRA (section 408A) plans. Still, a taxable 401(k) or traditional IRA payout raises your Form 1040 AGI and Line 13 MAGI. That higher MAGI can push your other dividends or gains over the threshold.
Part II Allocable Deductions and the 2026 Section 68 Rule
Under 26 U.S.C. § 1411(c)(1)(B) and 26 CFR § 1.1411-4(f), only deductions allowed for regular tax and tied to investment income enter Part II. On line 9a, enter the investment interest you deduct on Schedule A, line 9 (from Form 4952). On line 9b, enter the share of state, local, and foreign income and property taxes on Schedule A, line 7 tied to investment income. Apply the section 164(b)(6) SALT cap first. Sales taxes never count on line 9b, and standard-deduction filers must enter $0 on lines 9a and 9b.
Lines 9c and 10 cover smaller items that reduce taxable income. These include early-withdrawal penalties on CDs (Schedule 1, line 18) and bond premium amortization. They also include estate tax on income in respect of a decedent under section 691(c). Advisory fees and custody fees are barred because section 70110 of P.L. 119-21 ended section 67 deductions. Tax-prep fees count only when they are expenses of a rental or royalty activity.
Starting in 2026, section 70111 of P.L. 119-21 changes 26 U.S.C. § 68(a) for filers in the 37% bracket. It cuts itemized deductions by 2/37 of the smaller of those deductions or the taxable income above the 37% bracket start. Investment interest is no longer exempt from this cut. Use the Section 68 Limitation Worksheet in the 2026 draft Form 8960 instructions to trim lines 9a to 10 before you enter them.
Line 13 MAGI, Foreign Earned Income, and Special Filers
Without foreign earned income on Form 2555, line 13 of the NIIT form equals your regular adjusted gross income. If you exclude foreign pay on Form 2555, you must use the Line 13 MAGI Worksheet in the instructions. That worksheet adds back your section 911(a)(1) exclusion, less the deductions Form 2555 disallows for it under section 911(d)(6), to your adjusted gross income.
Nonresident aliens owe no NIIT under subsection (e)(1). A citizen or resident married to a nonresident alien uses the $125,000 separate threshold on Line 14. They can use the joint threshold only if they make a section 6013(g) or (h) election and also apply that election to this tax on the form.
Estates and trusts do not use the individual thresholds. They complete lines 18 to 21 and pay 3.8% above the top fiduciary bracket ($15,650 in 2025). In the 2025 instructions' qualified funeral trust example, two contracts at $15,650 give a $31,300 threshold, so $37,000 of NII leaves $5,700 taxed and $216.60 of tax. You can check fiduciary taxes in the trust and estate income tax calculator.
Formula
net investment income = interest + dividends + annuities + rental and pass-through + net gains − deductions (Form 8960 lines 8 to 12; zero if negative) amount over the threshold = max(0, MAGI − threshold) (line 15) taxed amount = min(net investment income, amount over the threshold) (line 16) NIIT = 3.8% × taxed amount (line 17), to the cent with halves up thresholds: $250,000 joint and qualifying surviving spouse, $125,000 separate, $200,000 single and head of household
Example
Default case (NII smaller than MAGI over threshold): A single filer has $300,000 of MAGI. They report $4,000 of interest, $12,000 of dividends, $24,000 of passive rent, and a $30,000 net gain, which totals $70,000 on line 8. Investment interest of $2,000 and $3,000 of allocable state and local taxes ($5,000 on line 11) leave $65,000 of net investment income on line 12. MAGI is $100,000 over the $200,000 threshold on line 15. Line 16 takes the smaller $65,000, so line 17 is 3.8% × $65,000 = $2,470.
Second case (MAGI over threshold smaller than NII): Keep the same investments and deductions, but drop MAGI to $240,000. Now the amount over the threshold on line 15 is $40,000, which is smaller than $65,000. The tax on line 17 is 3.8% × $40,000 = $1,520, and the other $25,000 of net investment income is not taxed.
2026 early release instructions example (Section 68 limit): In the 2026 draft Form 8960 instructions, Terry is single with $400,000 of interest and $2,000,000 of AGI. Terry has $77,000 of allocable deductions out of $155,000 of itemized deductions. The 2/37 cut under 26 U.S.C. § 68(a) trims itemized deductions by $8,378. That drops the allocable share by $4,162 to $72,838. Net investment income is $327,162 and the tax is $12,432 (the page shows $12,432.16 to the cent).
Assumptions and limitations
- For individuals only: estates and trusts use Form 8960 lines 18 to 21 with their own threshold. A nonresident alien owes no NIIT.
- You enter the line amounts. The page does not decide which income is passive or which gain is on a business you take part in. The Form 8960 instructions and Regulations sections 1.1411-4 and 1.1411-5 govern.
- Not modelled: the controlled foreign corporation and passive foreign investment company adjustments, and the section 1.1411-10(g) election. The net operating loss for the tax and the trader expense rule are also left out. Net investment income below zero counts as zero, as line 12 directs.
- Line numbers come from the 2025 form and instructions (dated February 4, 2026). The section 68 change comes from the early release 2026 instructions (dated October 15, 2026). Add your Form 2555 exclusion, less the deductions Form 2555 disallows for it, to your adjusted gross income before entering MAGI.
- The tax is shown to the cent with halves up and is the NIIT alone. The $1 trillion limit on each dollar field is this page's own.
These figures are estimates for learning and planning, not financial, tax, legal or investment advice. Terms of use.
What to do with the result
Pull the five income lines from your return. Take interest and dividends from Schedule B, nonqualified annuities from Form 1099-R, and passive rents or K-1 income from Schedule E. Take net gains from Schedule D and Form 8949, where net capital losses cap at $3,000 ($1,500 if filing separately).
Enter your Form 1040 AGI on the MAGI line with any planned sale gain included. Enter $0 for investment interest and state and local taxes if you take the standard deduction. In 2026, if your taxable income is in the 37% bracket, apply the 2/37 cut from the Section 68 Limitation Worksheet first.
If the tax is more than your withholding and estimated payments cover, raise one of them. In Topic No. 559, the IRS notes that estimated tax may need to rise to cover the NIIT. A $2,470 tax adds about $618 to each of four quarterly payments in the quarterly estimated tax calculator.
Frequently asked questions
Is the 3.8% applied to all of my investment income?
Not necessarily. It applies to the smaller of your net investment income and the amount your MAGI is over the threshold. At $240,000 of MAGI in the second example above, only the excess over the threshold is taxed, so the bill drops to $1,520.
Are my wages subject to the NIIT?
No. Wages are not net investment income, but they count in MAGI and can push you over the threshold. A single filer with $290,000 of wages and $10,000 of dividends has MAGI of $300,000, $100,000 over. The smaller amount is the $10,000 of dividends, so the tax is $380.
Does the threshold go up with inflation?
No. The three dollar thresholds are fixed in 26 U.S.C. § 1411(b), where they have stayed since the tax began in 2013, with no annual cost-of-living adjustment.
Is the gain on my home subject to the NIIT?
Only the taxable part. Gain that section 121 excludes, up to $250,000 or $500,000 on a joint return, is not net investment income. A single seller with a $400,000 gain on a main home excludes $250,000, and the other $150,000 counts. Gain on investment real estate or a second home counts in full.
Can I deduct investment advisory fees against investment income?
No. Miscellaneous investment expenses are not deductible, so they cannot reduce net investment income. Investment interest and allocable state and local taxes can. The default $2,000 and $3,000 cut $70,000 of income to $65,000 and, when net investment income is the smaller amount, cut the tax by $190.
Do 401(k) or IRA distributions count as net investment income?
No. Payouts from qualified retirement plans and IRAs do not count as net investment income under subsection (c)(5). Still, a taxable $50,000 traditional IRA payout raises your MAGI by $50,000. That can expose up to $50,000 of other dividends or gains to up to $1,900 of NIIT.
Sources
- 26 U.S.C. 1411, imposition of net investment income tax (Cornell LII text) (current version)
- 26 CFR 1.1411-4, definition of net investment income (Cornell LII text) (current version)
- IRS, Form 8960 (2025), Net Investment Income Tax (form dated Aug 19, 2025)
- IRS, 2025 Instructions for Form 8960, Net Investment Income Tax (form dated Feb 4, 2026)
- IRS, 2026 Instructions for Form 8960 (early release draft) (form dated Oct 15, 2026)
- 26 U.S.C. 68, overall limitation on itemized deductions (Cornell LII text) (current version)
- IRS, Topic No. 559, Net investment income tax (page reviewed Sep 24, 2026)
- IRS, Questions and answers on the Net Investment Income Tax (page reviewed Sep 14, 2026)
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