What Is the Net Investment Income Tax (NIIT)?
The Net Investment Income Tax (NIIT) is a 3.8% US federal tax on certain investment income — such as capital gains, dividends, interest, and rental income — for taxpayers whose modified adjusted gross income exceeds 200,000 (single) or 250,000 (married filing jointly). It applies to the smaller of net investment income or the income above the threshold.
Example
A single filer with 230,000 of MAGI, including 50,000 of investment income, owes NIIT on 30,000 (the amount above 200,000), which is 1,140.
Fixed Thresholds
The thresholds are set in law and are not indexed for inflation.
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.