Net Investment Income Tax (NIIT) 2027 Calculator

Calculate the federal 3.8% Net Investment Income Tax (NIIT) on Form 8960 for tax year 2027 — applies to high-income taxpayers with modified AGI over $200,000 single / $250,000 MFJ / $125,000 MFS. Thresholds are NOT indexed for inflation. Free, private, no sign-up.

Net Investment Income Tax (NIIT)
$0
3.8% of the lesser of NII or MAGI excess
Net investment income
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Gross − expenses
MAGI excess over threshold
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vs $200k single / $250k MFJ
NIIT base (lesser of)
—
Taxed at 3.8%
Item Amount (USD)
NIIT 2027 rules (unchanged since 2013): The 3.8% NIIT applies to the LESSER of (a) net investment income or (b) MAGI excess over $200,000 single / $250,000 MFJ / $125,000 MFS. The thresholds are NOT indexed for inflation — so each year more taxpayers cross them. NIIT is reported on Form 8960 and added to federal income tax on Schedule 2. Wages and active business income are NOT investment income.
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What is the Net Investment Income Tax?

The Net Investment Income Tax (NIIT) is a 3.8% federal surtax on investment income for higher-income taxpayers, introduced by the Affordable Care Act in 2013. It applies to U.S. citizens and resident aliens with modified AGI above:

$200,000 for single or head of household filers, $250,000 for married filing jointly, and $125,000 for married filing separately. Critically, these thresholds are NOT indexed for inflation — they have been frozen since 2013, so every year more middle-income filers cross them. The OBBB did not change the NIIT rate or thresholds.

What counts as Net Investment Income?

Investment income includes: interest, ordinary and qualified dividends, capital gains (short and long-term), rental and royalty income (unless from a non-passive trade or business), non-qualified annuity income, and passive business income from partnerships and S corporations. Investment income does NOT include: wages, unemployment, Social Security benefits, alimony, retirement plan distributions (401(k), IRA, pension), or income from an active trade or business.

From gross investment income you subtract "investment expenses" — investment advisory fees (though largely deductibility-limited post-TCJA), tax preparation expenses allocable to investment income, state income tax on investment income, and investment interest. The result is "net investment income" reported on Form 8960 line 8.

Calculating the 3.8% NIIT

The NIIT equals 3.8% of the smaller of (a) net investment income or (b) the amount your MAGI exceeds the threshold. Example: a single filer with $25,000 of net investment income and MAGI of $280,000. MAGI excess = $280,000 − $200,000 = $80,000. NIIT base = the smaller of $25,000 or $80,000 = $25,000. NIIT = $25,000 × 3.8% = $950.

Strategies to reduce NIIT exposure include: shifting investment income to a non-grantor trust (with its own much lower MAGI threshold of $15,750 for 2027 but separate brackets), using municipal bonds (federally tax-exempt interest is excluded from NII), accelerating capital losses to offset gains, contributing to retirement accounts (deductible 401(k)/IRA contributions lower MAGI), and converting passive rental activities to active under the real estate professional rules (750+ hours and material participation).

Source: irs.gov — Form 8960 and §1411 regulations. Updated May 2026 reflecting OBBB (P.L. 119-21) — no NIIT changes.

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