Net Investment Income Tax (NIIT) Calculator
The Net Investment Income Tax (NIIT) is a 3.8% federal tax on investment income for higher-income individuals, estates and trusts under Internal Revenue Code Section 1411. It applies to the lesser of your net investment income and the amount by which your modified adjusted gross income (MAGI) exceeds the threshold for your filing status. The 3.8% rate is fixed in statute; the MAGI threshold is provided as an editable input because Congress sets it and it is not inflation-indexed. Enter your figures to estimate your NIIT.
NIIT formula
Excess MAGI = max(0, MAGI - threshold) Base = min(net investment income, excess MAGI) NIIT = rate% x Base
If MAGI is at or below the threshold, the excess is zero and no NIIT is due.
Worked example
MAGI 260,000 with a 250,000 threshold gives excess of 10,000. Net investment income is 40,000, so the base is the lesser: 10,000. NIIT = 3.8% x 10,000 = 380.00.
NIIT: frequently asked questions
What is the Net Investment Income Tax?
The Net Investment Income Tax (NIIT) is a 3.8% tax under Internal Revenue Code Section 1411 on certain investment income for individuals, estates and trusts whose income exceeds set thresholds. It applies to the lesser of your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds the threshold for your filing status.
What counts as net investment income?
Net investment income generally includes interest, dividends, capital gains, rental and royalty income, non-qualified annuities, and income from businesses that are passive activities or that trade financial instruments. It excludes wages, self-employment income, Social Security benefits, tax-exempt interest, and distributions from qualified retirement plans.
Why is the threshold an editable input?
The MAGI thresholds in Section 1411 (for example, the married-filing-jointly threshold) are fixed in the statute and are not indexed for inflation, but they can be changed by Congress. To stay accurate and never display a stale figure, this calculator takes the threshold as an editable input. Confirm the current threshold for your filing status on the IRS NIIT page.
How is the 3.8% applied?
The tax is 3.8% multiplied by the smaller of two amounts: (1) your net investment income, and (2) the excess of your MAGI over the applicable threshold. If your MAGI is at or below the threshold, you owe no NIIT even if you have investment income.
Official sources
- Internal Revenue Service: Net Investment Income Tax.
- Internal Revenue Service: About Form 8960, Net Investment Income Tax.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.