Knowledge Tree
net investment income tax
Also known as: NIIT
Facts (12)
Sources
Capital Gains and Tax Loss Harvesting Explained - Mercer Advisors merceradvisors.com Oct 15, 2025 8 facts
procedureTaxpayers can calculate and report the Net Investment Income Tax (NIIT) using IRS Form 8960.
claimThe Net Investment Income Tax (NIIT) income thresholds are not adjusted for inflation, which results in more taxpayers becoming subject to the tax over time.
claimInvestment income subject to the Net Investment Income Tax (NIIT) includes capital gains from the sale of stocks, bonds, and other property; dividends; interest; rental and royalty income (unless derived in an active trade or business); income from a business involved in trading financial instruments or commodities; passive income from a business in which the taxpayer does not actively participate; and taxable portions of nonqualified annuity payments.
formulaThe Net Investment Income Tax (NIIT) is calculated as 3.8% of the lesser of two amounts: the taxpayer's net investment income or the amount by which the taxpayer's modified adjusted gross income (MAGI) exceeds the applicable threshold for their filing status.
claimInvestment income not subject to the Net Investment Income Tax (NIIT) includes wages, Social Security benefits, unemployment compensation, tax-exempt interest, distributions from qualified retirement plans (such as 401(k)s or IRAs), and income from an actively run business.
claimEstates and trusts are subject to the Net Investment Income Tax (NIIT) if they have undistributed net investment income and their adjusted gross income (AGI) exceeds the dollar amount at which the highest tax bracket begins for that tax year.
measurementThe modified adjusted gross income (MAGI) thresholds for the Net Investment Income Tax (NIIT) are $250,000 for married filing jointly, $250,000 for qualifying widow(er)s, $200,000 for single filers, $200,000 for heads of household, and $125,000 for married filing separately.
claimThe Net Investment Income Tax (NIIT) adds a 3.8% tax to net investment income when a taxpayer's modified adjusted gross income (MAGI) exceeds specific thresholds.
Managing Your Retirement Portfolio | FINRA.org finra.org 1 fact
measurementAs of January 1, 2013, the United States tax code imposes a Net Investment Income Tax of 3.8 percent on investors who meet specific income thresholds and other criteria.
Wealthfront Tax-Loss Harvesting - Methodology research.wealthfront.com Jul 1, 2025 1 fact
measurementTaxpayers with joint incomes above $250,000 are subject to an additional 3.8% Net Investment Income Tax on all capital gains, dividends, and interest.
Tax Loss Harvesting Rules: What High-Income Investors Need To ... truewealthdesign.com 5 days ago 1 fact
measurementFor high-income households, long-term capital gains are generally taxed at 20% federally, plus a 3.8% Net Investment Income Tax, often resulting in a marginal tax impact of approximately 23.8% before state taxes.
Advanced Tax Management Strategies | Build & Preserve Wealth ptcpas.com 1 fact
claimHigh earners making $250,000 or more annually face increased financial complexity due to alternative minimum tax considerations, net investment income tax, and various phase-outs.