Net Investment Income Tax Liability

Estimate how much of your passive income triggers the 3.8% Net Investment Income Tax. Supply your modified AGI and net investment income, then optionally specify a filing status so the calculator compares both figures to the IRS threshold and reports the tax due.

Total MAGI used for NIIT calculations, including add-backs required by IRC §1411.
Interest, dividends, capital gains, rental, and passive income subject to NIIT.
Leave blank for single/head-of-household thresholds. Enter MFJ, MFS, HOH, widow, or trust/estate to apply other limits.

Use for planning only—consult a tax professional for filing advice and to confirm current-year thresholds.

Examples

  • Single filer, $265,000 MAGI, $45,000 NII ⇒ Single / Head of household threshold: $200,000.00 USD • MAGI above threshold: $65,000.00 USD • NIIT base (lesser of income or excess): $45,000.00 USD • Tax at 3.80%: $1,710.00 USD • Share of net investment income taxed: 100.00%.
  • MFJ, $360,000 MAGI, $58,000 NII ⇒ Married filing jointly / Qualifying widow(er) threshold: $250,000.00 USD • MAGI above threshold: $110,000.00 USD • NIIT base (lesser of income or excess): $58,000.00 USD • Tax at 3.80%: $2,204.00 USD • Share of net investment income taxed: 100.00%.

FAQ

How do I lower MAGI for NIIT purposes?

Deferring capital gains, harvesting losses, increasing above-the-line deductions, or executing Roth conversions in low-income years can all reduce MAGI that pushes you over the threshold.

Are qualified dividends and long-term capital gains treated differently?

They still count as net investment income. The NIIT applies after preferential capital gains tax rates, adding 3.8% on top once the threshold is exceeded.

Do retirement account distributions trigger NIIT?

Qualified distributions from IRAs, 401(k)s, pensions, and Social Security benefits do not count as net investment income, though they may raise MAGI enough to expose other investment income to the tax.

Additional Information

  • The Net Investment Income Tax applies the lesser of (a) net investment income or (b) MAGI above the threshold to a flat 3.8% rate.
  • Thresholds are not indexed for inflation for individuals, but the estate and trust limit (used when status is trust/estate) adjusts annually; this tool uses the 2024 value of $15,200.
  • Net investment income excludes wages, self-employment earnings, active business income, and qualified retirement plan distributions.

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