Net Investment Income Tax

The Net Investment Income Tax is a surtax of 3.8% on the lesser of your modified adjusted gross income over $250,000 ($200,000 if single). It is imposed on individuals, estates and trusts.

Net investment income is income from interest, dividends, annuities, capital gains, royalties, and rents. It also includes income from a trade or business in which you are a passive investor. It does not include income from a trade or business in which you actively participate. However, some types of income from a business in which you actively participate may be considered net investment income depending on the source of the income.