Net Investment Income Tax (NIIT) Calculator

What Is the NIIT Calculator?

The Net Investment Income Tax is a 3.8% surtax (IRC section 1411) on the lesser of your net investment income (interest, dividends, capital gains, rental/passive income, etc.) or the amount your MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). These thresholds are fixed by statute, not inflation-indexed, and have been unchanged since NIIT took effect in 2013.

How to Use This Tool

Enter your MAGI, your net investment income, and select your filing status. Your estimated NIIT appears instantly.

Step-by-Step: What the Tool Computes

The calculator performs three steps. First it subtracts the filing-status threshold (200,000 dollars for single, 250,000 dollars for married filing jointly) from your MAGI, with a floor of zero. Second it takes the smaller of that excess and your net investment income (also floored at zero). Third it multiplies that amount by 3.8 percent. Because of the second step, only the lesser of the two amounts is taxed, which is why the tax can never exceed 3.8 percent of your investment income.

Worked Examples With Hypothetical Numbers

• Single, MAGI 220,000, investment income 30,000. The excess over the threshold is 20,000, which is lower than 30,000, so the taxable base is 20,000. NIIT = 760 dollars.
• Single, MAGI 320,000, investment income 30,000. The excess is 120,000, but investment income is only 30,000, so the base is 30,000. NIIT = 1,140 dollars.
• Married filing jointly, MAGI 240,000, any investment income. MAGI is under the 250,000 threshold, so the tax is zero.

The examples show the two regimes: near the threshold, your MAGI excess limits the tax; far above it, your investment income does.

Where Inputs Come From and Where People Slip

• MAGI for NIIT purposes starts with adjusted gross income and adds back certain foreign income exclusions. For most people it equals AGI, but confirm this with the Form 8960 instructions on IRS.gov.
• Net investment income is investment income minus allowable related deductions, such as investment interest expense or, for rental property, certain expenses. If you enter gross figures, you may overstate the tax. Capital losses can reduce the amount, subject to the usual rules.
• Selling a home may produce a gain that is partly excluded from regular income; the excluded part is also not in NIIT. Do not include an amount that the tax rules exclude.
• Income from an active trade or business you materially participate in is generally treated differently from passive income. This tool does not test participation, so the classification is your call or your tax preparer's.
• Filing statuses other than single and married filing jointly, such as married filing separately or head of household, have different thresholds that this tool does not offer, so it is not suited to those situations.

Timing and Planning

Because a large one-time gain, such as selling a property or stock, can push MAGI above the threshold in a single year, the tool is useful for testing what-if scenarios before a sale. Try lowering the investment income or the MAGI to see how the tax responds. Spreading gains across years, retirement contributions and harvesting losses are commonly discussed strategies, and their suitability depends on your full tax situation. NIIT is reported on IRS Form 8960 with your return. This tool provides an estimate for education only; consult a tax professional for your actual liability, and verify current thresholds and rules at IRS.gov.

Frequently Asked Questions