What is Net Investment Income Tax (NIIT) and Who Pays It? What is net investment income tax (NIIT)? The net investment income tax is a 3 8% tax you must pay if your modified adjusted gross income (MAGI) exceeds a certain threshold
Topic no. 559, Net investment income tax | Internal Revenue Service The NIIT applies to income from a trade or business that is (1) a passive activity, as determined under § 469, of the taxpayer; or (2) trading in financial instruments or commodities, as determined under § 475 (e) (2)
Net Investment Income Tax | Internal Revenue Service Form 8960 Instructions PDF provides details on how to figure the amount of investment income subject to the tax If an individual has too little withholding or fails to pay enough quarterly estimated taxes to also cover the Net Investment Income Tax, the individual may be subject to an estimated tax penalty
Net Investment Income Tax | Schwab As an investor, you may owe an additional 3 8% tax called net investment income tax (NIIT) But you’ll only owe it if you have investment income and your modified adjusted gross income (MAGI) goes over the IRS threshold