At a glance
Quick answer
The NIIT calculator applies the 3.8% Net Investment Income Tax to the lesser of two amounts: supported net investment income, or modified adjusted gross income above the filing-status threshold. It is useful when a taxpayer already knows both inputs and wants to understand why the whole investment-income amount is not always taxed. NIIT does not replace capital-gain or dividend tax; it can sit on top of those calculations. Nonresident aliens generally are not subject to NIIT, while dual status and joint election cases require the Form 8960 rules. The page does not decide which expenses reduce net investment income, how a trade or business is classified, or whether a special disposition is excluded.
How the calculation works
Measure excess MAGI over the statutory threshold
Start with modified adjusted gross income for NIIT purposes and subtract the filing-status threshold. The thresholds are $200,000 for single and head of household, $250,000 for married filing jointly and qualifying surviving spouse, and $125,000 for married filing separately. If MAGI does not exceed the threshold, the excess is zero and the modeled NIIT is zero even when net investment income is positive.
Identify net investment income independently
Net investment income can include interest, dividends, annuities, royalties, rents, and net gain from property dispositions, reduced by properly allocable deductions. Wages, unemployment compensation, Social Security benefits, tax-exempt interest, and many qualified-plan distributions generally do not enter the same category. The calculator assumes the entered amount is already the supported net figure; it does not derive investment expenses from brokerage statements.
Apply 3.8% to the lesser base
Compare excess MAGI with net investment income after both are calculated. The smaller amount is the NIIT base. Multiply that base by 3.8%. This lesser-of rule prevents the tax from applying to investment income beyond the amount by which MAGI crosses the threshold, while also preventing the base from exceeding net investment income. The regular tax on interest, dividends, or gains remains separate.
Check ownership, business, and disposition boundaries
Material participation, passive activity rules, working-capital treatment, real-estate-professional status, installment sales, and certain business dispositions can change net investment income. NIIT is not Additional Medicare Tax: both use income thresholds, but one concerns net investment income and the other concerns Medicare wages or self-employment compensation. AMT and state investment taxes are also outside this focused computation. Use Form 8960 and complete return facts before filing.
2025 and 2026 values
Tax year 2025
2025 final NIIT values
The final 2025 NIIT rate is 3.8%. MAGI thresholds are $200,000 single or head of household, $250,000 married filing jointly or qualifying surviving spouse, and $125,000 married filing separately.
Tax year 2026
2026 planning NIIT values
The 2026 planning calculation retains the statutory 3.8% rate and the $200,000, $250,000, and $125,000 filing-status thresholds in the implemented data.
Recalculate it yourself
Worked example
$80,000 investment income with $250,000 single MAGI
A single filer enters $250,000 modified adjusted gross income and $80,000 supported net investment income.
- Excess MAGI = $250,000 − $200,000 single threshold = $50,000.
- Supported net investment income = $80,000.
- NIIT base = lesser of $50,000 excess MAGI or $80,000 net investment income = $50,000.
- NIIT = $50,000 × 3.8% = $1,900.
Result
The modeled NIIT is $1,900. Applying 3.8% to the full $80,000 would be wrong because excess MAGI is the smaller statutory base.
What is included
- Modified adjusted gross income, filing-status threshold, excess MAGI, supported net investment income, lesser-of comparison, 3.8% rate, and NIIT.
- Final 2025 and planning 2026 statutory values. The result preserves both candidate bases before choosing the lesser amount, so the taxpayer can verify whether MAGI headroom or net investment income controls the tax and avoid applying 3.8% automatically to every dividend, gain, rent, or interest dollar.
What is not included
- Regular tax on interest, dividends, or gains; investment-expense derivation; passive activity and material-participation decisions; Form 8960 special adjustments; AMT; Additional Medicare Tax; and state tax.
- A legal classification of a business, rental, annuity, trust, estate, disposition, materially participating owner, real-estate professional, or properly allocable investment deduction status.
Common mistakes
Multiplying all investment income by 3.8%
The tax base is the lesser of net investment income and excess MAGI. In the example, $50,000 rather than $80,000 receives the rate.
Using taxable income instead of MAGI
The threshold test uses modified adjusted gross income for NIIT purposes. Taxable income after deductions answers a different question.
Treating NIIT as Additional Medicare Tax
NIIT concerns net investment income. Additional Medicare Tax uses wages and self-employment compensation under separate filing and employer rules.
Frequently asked questions
What does the NIIT calculator apply the 3.8 percent rate to?
It applies the rate to the lesser of supported net investment income or the amount by which modified adjusted gross income exceeds the filing status threshold.
Is all investment income automatically subject to NIIT?
No. Federal rules define included and excluded investment income, and deductions can affect the net amount. Enter only amounts supported by the calculator.
Does NIIT replace capital gains or dividend tax?
No. Net Investment Income Tax is an additional federal tax. Regular federal tax on gains, dividends, interest, or other income is calculated separately.