Are You Subject to the Net Investment Income Tax?
Besides regular income tax, individual taxpayers are liable for a 3.8% Net Investment Income Tax on the lesser of (a) their net investment income, or (b) the amount by which their modified adjusted gross income exceeds a statutory threshold amount based on their filing status.
The statutory threshold amounts are:
Married filing jointly — $250,000,
Married filing separately — $125,000,
Single or head of household — $200,000, or
Qualifying widow(er) with a child — $250,000.
In general, net investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, and non-qualified annuities.
Net investment income does not include wages, unemployment compensation, Social Security Benefits, alimony, retirement plan distributions and self-employment income.