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.
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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.
Run the calculator above with a single filer, $260,000 MAGI, $8,000 in dividends, $30,000 in long-term capital gains, and $12,000 in rental income, with interest, short-term gains, royalties, passive business income, and investment expenses all cleared to $0 (the calculator loads with a sample $4,500 of interest and $1,200 of expenses pre-filled; clear those two fields to reproduce this example exactly). Net investment income comes to $8,000 + $30,000 + $12,000 = $50,000. The threshold excess is $260,000 minus the $200,000 single threshold, or $60,000. The lesser-of formula compares $50,000 (NII) against $60,000 (excess) and taxes the smaller number: $50,000 x 3.8% = $1,900 in NIIT.
Now change only the MAGI, down to $210,000, barely over the threshold, while keeping a big $80,000 NII year (say, from selling a rental property). The naive assumption, 3.8% of all investment income, gives 0.038 x $80,000 = $3,040. The actual formula caps NIIT at the smaller of NII or excess: excess is only $210,000 minus $200,000, or $10,000, so NIIT is 0.038 x $10,000 = $380, a full $2,660 less than the naive estimate. Being barely over the threshold protects most of that capital gain from the surtax, even in a huge investment-income year. That gap is exactly why the calculator above walks through both sides of the lesser-of comparison instead of just multiplying your NII by 3.8%.
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.
Select "Estates and Trusts" as the filing status above and the threshold drops to a small fraction of the individual amounts. Trusts and estates hit their top 37% income tax bracket at a strikingly low level of undistributed income, and NIIT applies starting at that same point. For 2026, the IRS set the top trust bracket, and this calculator's estate threshold, at a figure in the mid five-figure range, a small fraction of the $200,000 individual threshold. Unlike the individual thresholds, the trust and estate figure is not fixed; it is tied to the top ordinary income bracket for trusts and gets republished in an annual IRS revenue procedure, so it is worth reconfirming each filing season rather than assuming last year's number still applies.
Run the calculator with the estate filing status, $40,000 in undistributed trust income and $35,000 of that as net investment income, and you can see the mechanism directly: because the threshold is so low, almost all of the trust's investment income ends up exposed to NIIT, unlike an individual with the same $35,000 of investment income sitting comfortably under a $200,000 or $250,000 threshold. This is the reason trustees often push income out to beneficiaries through distributions before year end. A beneficiary receiving that same income typically reports it on their own return and tests it against their own, much higher, individual threshold instead of the trust's compressed one, an approach known as the distributable net income deduction. That decision involves trust accounting and fiduciary duties beyond what this calculator models, so loop in a CPA who works with trusts before acting on it.
This calculator is part of FigureNerd's Tax and Investment Income tools:
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.
Because NIIT is capped by whichever number is smaller: your net investment income, or the amount your MAGI exceeds the threshold. A filer at $210,000 MAGI with $80,000 of net investment income only owes NIIT on the $10,000 excess over the $200,000 threshold, 0.038 x $10,000 = $380, not 0.038 x $80,000 = $3,040. A filer at $260,000 MAGI with the same $80,000 NII owes NIIT on the full $60,000 excess, since $60,000 is now the smaller number: 0.038 x $60,000 = $2,280. Same investment income, very different NIIT bills, purely because of how far over the threshold the MAGI sits.
The individual thresholds ($200,000 single and head of household, $250,000 married filing jointly, $125,000 married filing separately) are fixed dollar amounts written into IRC Section 1411 and have not been adjusted for inflation since NIIT took effect in 2013, per IRS Topic 559. The estates and trusts threshold is the exception; it is tied to the top trust tax bracket and does adjust annually. For individuals, that means more households cross into NIIT territory over time from ordinary wage and investment growth alone, without any change in the law.
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.
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