Net Investment Income Tax (NIIT)

Definition

Section 1411 imposes a 3.8 percent NIIT on the lesser of net investment income or MAGI above $200,000 single / $250,000 joint / $125,000 MFS. Investment income includes interest, dividends, capital gains, rental and royalty income (in many cases), and passive business income.

Examples

• A high-income filer with $50,000 of investment income above the MAGI threshold owes about $1,900 in NIIT.