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    Tax / NIIT

    Net Investment Income Tax

    The 3.8% surtax on investment income above the statutory threshold. It applies to the lesser of net investment income and the excess of MAGI over the threshold, so a large salary can expose dividends that would otherwise escape.

    NIIT$1,520Taxable base$40,000MAGI excess$60,000
    NIIT
    $1,520
    3.8% of the base
    Taxable base
    $40,000
    Lesser of NII and the excess
    MAGI excess
    $60,000
    over $200,000
    Effective rate on NII
    3.80%
    Of investment income
    Thresholds
    Thresholds are statutory and not indexed: $200,000 single, $250,000 married filing jointly.
    Thresholds
    Filing statusThreshold
    Single$200,000
    Married filing jointly$250,000
    Married filing separately$125,000
    Inspect the model
    Choose a quick result view, a scaled comparison, or the complete diagnostic set.
    NIIT against MAGI
    The tax switches on at the threshold and stops growing once all investment income is taxed.
    NIIT against MAGI0.000340.48680.961021.441361.921702.40150k150k200k200k250k250k300k300k400k400k600k600kNet Investment Income Tax
    Canonical equations
    The exact relationships implemented by this engine.

    3.8% × min(NII, MAGI − threshold) · IRC §1411.

    not indexed · $200k / $250k / $125k.

    finance methodology

    A clear path from inputs to results.

    The 3.8% surtax on investment income above the statutory threshold. It applies to the lesser of net investment income and the excess of MAGI over the threshold, so a large salary can expose dividends that would otherwise escape.

    Step-by-step methodWorked exampleAssumptions explained

    How to use

    1. Set modified agi ($).
    2. Set net investment income ($).
    3. Set filing status.
    4. Read the headline metrics, then check the table for the detail.

    The formula

    3.83.8% × min(NII, MAGI − threshold)

    Reference: IRC §1411; thresholds are statutory and not indexed for inflation.

    Worked example

    At the default inputs

    Inputs
    • Modified AGI ($): 260000; Net investment income ($): 40000; Filing status: single
    Calculation path
    1. 1

      NIIT: $1,520 · Taxable base: $40,000 · MAGI excess: $60,000 · Effective rate on NII: 3.80%

    Result

    NIIT: $1,520 · Taxable base: $40,000 · MAGI excess: $60,000

    Interpreting the result

    With $260,000 of MAGI and $40,000 of investment income, the NIIT is $1,520.

    Assumptions & limitations

    • Thresholds are not indexed.
    • Net investment income excludes wages and active business income.

    Frequently asked questions

    Does a salary trigger it?

    Only indirectly: high wages push MAGI over the threshold, exposing investment income that would otherwise escape.

    Is it on top of capital gains tax?

    Yes — it is a surtax, not a replacement.

    Methodology last reviewed 2026-10-22. Results are informational and not financial or engineering advice — see our disclaimer.