Net Investment Income Tax (NIIT) 2026 Calculator
The Net Investment Income Tax (NIIT) adds 3.8% to investment income for high earners. The MAGI threshold is $200K single, $250K married filing jointly — and has not been indexed for inflation since 2013. Calculate your NIIT exposure for 2026.
What Counts As Net Investment Income
NIIT applies to: interest, dividends (qualified and ordinary), capital gains (short and long), rental income (unless real estate professional), royalty income, and non-qualified annuity income. Wages, Social Security, traditional retirement account distributions, and tax-exempt municipal bond interest are NOT subject to NIIT.
Strategies To Reduce NIIT
(1) Municipal bonds — interest is exempt from NIIT and federal income tax. (2) Maximize retirement contributions to reduce MAGI below threshold. (3) Real estate professional status under IRC Section 469 — converts rental income from passive (NIIT-able) to active (NIIT-free). (4) Tax-loss harvesting to offset capital gains. (5) Charitable remainder trusts to defer recognition.
Form 8960 Reporting
NIIT is calculated and reported on IRS Form 8960. The form attaches to Form 1040 if any NIIT is owed. Even if MAGI is over the threshold, NIIT is only owed on the lesser of NII or the MAGI excess — so a high-MAGI taxpayer with $0 in investment income owes no NIIT.
Source: IRS Form 8960 instructions, IRC Section 1411 Net Investment Income Tax. Last updated: May 2026.