Calculate your 3.8% NIIT exposure based on your MAGI, filing status, and investment income. See exactly which income types are subject to NIIT and when the surcharge kicks in.
You crossed $250,000 in income this year -- which means every dollar of investment income you earned is now subject to an extra 3.8% federal tax on top of your regular rate. Most investors find out from their CPA at tax time. This calculator gives you the number before the surprise.
The Net Investment Income Tax is a 3.8% federal surtax imposed under IRC Section 1411. It applies when your modified adjusted gross income (MAGI) exceeds a threshold based on your filing status, and it taxes investment income -- not all income. Wages, self-employment income, and Social Security are not subject to NIIT.
The key phrase: NIIT applies to the lesser of (a) your net investment income or (b) the amount your MAGI exceeds the applicable threshold. This lesser-of formula is shown in the calculator above, and it is the single most misunderstood aspect of NIIT.
Net Investment Income (NII) includes:
Income NOT subject to NIIT includes wages, self-employment income, active business income, Social Security benefits, alimony, tax-exempt interest, pension income, and distributions from IRAs and qualified retirement plans.
The calculator computes the standard NIIT formula. Several important exceptions apply in practice -- consult a CPA if any of these apply to your situation.
This calculator is part of FigureNerd's Tax and Investment Income cluster:
The Net Investment Income Tax is a 3.8% federal surtax on net investment income that applies when your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). It was enacted by the Affordable Care Act and went into effect in 2013. NIIT applies on top of regular income tax and capital gains tax -- it does not replace them.
Net Investment Income includes taxable interest, dividends, capital gains, net rental income, royalties, and income from passive business activities. Wages, self-employment income, Social Security benefits, and income from businesses where you materially participate are generally not subject to NIIT. The NIIT applies to the net amount after certain investment expense deductions.
NIIT is 3.8% times the lesser of: (1) your net investment income, or (2) the amount your modified adjusted gross income exceeds the applicable threshold ($200,000 for single filers, $250,000 for married filing jointly). You compute NIIT on IRS Form 8960 and attach it to your Form 1040.
Yes. A 1031 like-kind exchange defers the capital gain and rental income event that would otherwise create net investment income. By reinvesting in a replacement property within the IRS-required 180-day window, you defer the gain -- and the NIIT that would have applied to it -- into future tax years. If you continue doing 1031 exchanges, the NIIT can be deferred indefinitely.
Rental income is generally subject to NIIT for passive investors. Taxpayers who qualify as real estate professionals (750 or more hours per year in real property trades and more than half their working hours in those activities) may be able to treat rental income as non-passive and potentially exclude it from NIIT. The NIIT real estate professional exception has specific requirements that differ from the passive loss rules -- consult a CPA if you may qualify.
This calculator is designed to estimate Net Investment Income Tax under IRC Section 1411. The computation uses the lesser-of formula: NIIT applies to the lesser of your net investment income or the amount your MAGI exceeds the applicable threshold. Results are for educational planning purposes only. Complex scenarios -- including material participation exceptions, real estate professional status, self-rental rules, and installment sales -- are not fully modeled here. Thresholds are based on 2025/2026 IRS guidance. Consult a CPA or tax attorney before making transactions based on this estimate. IRS Form 8960 and its instructions are the authoritative source for NIIT computation.