Net Investment Income
Category: Investment · Related form: Form 8960
Generally interest, dividends, capital gains, rental and passive income (with modifications) that feed the 3.8% Net Investment Income Tax when MAGI exceeds statutory thresholds.
How Net Investment Income fits 2026 planning
Net Investment Income sits inside capital gains, dividends, wash-sale timing, and surtaxes such as NIIT that sit beside ordinary brackets. For tax year 2026, US Tax Tools treats year-scoped constants (brackets, contribution limits, wage bases, credit schedules) as separate datasets — so explanations of Net Investment Income should be read with the same year selected in any linked calculator.
Category focus: Investment. Readers usually land on this page while comparing a paycheck estimate, a credit phaseout, or a retirement contribution room figure that depends on understanding Net Investment Income first.
Worked example
A single filer with $220,000 MAGI and $40,000 of net investment income may owe NIIT on part of that $40,000.
Treat the example as a teaching sketch, not a filing position. Change filing status, state residency, or mid-year events and the same definition of Net Investment Income can produce a different cash outcome even when the glossary text stays the same.
What to watch for
Definitions of Net Investment Income can differ slightly across IRS publications, SSA rules, Marketplace subsidy worksheets, and state agencies. When two programs both say “income,” confirm which modification rules apply — MAGI for one credit is not always MAGI for another.
Legislation and inflation adjustments can move the dollar thresholds around Net Investment Income without renaming the concept. Prefer the effective date on the primary source (Rev. Proc., SSA notice, USDA table, or state DOR bulletin) over any blog summary — including this one if a later notice supersedes it.
On a filed return, Net Investment Income most often surfaces around Form 8960. Read the official IRS instructions for that form for the tax year you are filing — glossary pages summarize concepts; they do not replace line-by-line worksheets.
Next step
When you are ready to model numbers, open the Net Investment Income related calculator on US Tax Tools. Engines keep tax-year datasets separate so a 2025 habit does not silently reuse a 2026 constant.
Related reading: Tax insights for longer 2026 explainers, Methodology for how engines store cents and traces, and Disclaimer for educational-use limits.