2019 Net Investment Income Tax Threshold
For 2019, the Net Investment Income Tax Threshold is 3.8% (Rate), $250,000 (Married filing jointly), $125,000 (Married filing separately) and $200,000 (Single or head of household).
Effective 2019-01-01Source: 2019 Instructions for Form 8960 (IRS)Verified 2026-08-29
Compared with 2018
Every figure on this page is unchanged from 2018.
| Item | 2018 | 2019 | Change |
|---|---|---|---|
| Rate | 3.8% | 3.8% | +0% (+0.0%) |
| Married filing jointly | $250,000 | $250,000 | +$0 (+0.0%) |
| Married filing separately | $125,000 | $125,000 | +$0 (+0.0%) |
| Single or head of household | $200,000 | $200,000 | +$0 (+0.0%) |
Who it applies to
Individuals, estates, and trusts that owe Net Investment Income Tax and file Form 8960
What changed this year, and why
For 2019, the Net Investment Income Tax thresholds are $250,000 for married filing jointly or qualifying widow(er), $125,000 for married filing separately, and $200,000 for single or head of household. The rate is 3.8%. These thresholds are unchanged from 2018.
Common questions
- How is the Net Investment Income Tax calculated?
- The tax is 3.8% of the smaller of your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds the threshold for your filing status.
- What are the income thresholds?
- The 2019 thresholds are $250,000 for married filing jointly or qualifying widow(er), $125,000 for married filing separately, and $200,000 for single or head of household.
What the 3.8% is actually charged on
The 3.8% Net Investment Income Tax is charged on "net investment income," which the IRS defines broadly. It includes gross income from interest, dividends, annuities, royalties, and rents, unless those items come from the ordinary course of a trade or business that is neither a passive activity nor a trading business. It also captures gross income from a trade or business that is a passive activity or a trading business in financial instruments or commodities. In addition, net gain from the sale of property (to the extent included in taxable income) is part of net investment income, unless the property was held in a trade or business that is neither passive nor a trading business. Finally, you may reduce these amounts by deductions that are properly allocable to the income or gain. The result is the base on which the 3.8% rate is applied.
Net investment income. Generally, net investment income includes gross income from interest, dividends, annuities, royalties, and rents, unless they’re derived from the ordinary course of a trade or business that isn’t (a) a passive activity, or (b) a trade or business of trading in financial instruments or commodities. In addition, net investment income includes other gross income derived from a trade or business that’s (a) a passive activity, or (b) a trade or business of trading in financial instruments or commodities. Additionally, net investment income includes net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property other than property held in a trade or business that’s not (a) a passive activity, or (b) a trade or business of trading in financial instruments or commodities. To arrive at net investment income, the above items are reduced by deductions allowed against the income tax which are properly allocable to those items of gross income or net gain.
2019 Instructions for Form 8960, Net Investment Income Tax (IRS)
Wages, Social Security and retirement income are outside it
Certain types of income are specifically left out of the net investment income calculation. Wages, unemployment compensation, Alaska Permanent Fund Dividends, and alimony are not included. Social Security benefits, tax-exempt interest income, and income from qualified retirement plan distributions are also excluded. Additionally, income that is already subject to self-employment taxes falls outside the scope of the 3.8% tax. In general, earned income and retirement-related distributions are not subject to this tax - it targets investment returns and passive income, not labor compensation or Social Security.
Excluded income. Excluded income means: • Income excluded from gross income in chapter 1 of the Internal Revenue Code; • Income not included in net investment income; and • Gross income and net gain specifically excluded by section 1411, related regulations, or other guidance published in the Internal Revenue Bulletin.
2019 Instructions for Form 8960, Net Investment Income Tax (IRS)
You are taxed on the smaller of two amounts
Individuals who have for the tax year (a) MAGI that's over an applicable threshold amount, and (b) net investment income, must pay 3.8% of the smaller of (a) or (b) as their NIIT. The applicable threshold amount is based on your filing status: Married Filing Jointly or Qualifying Widow(er) is $250,000, Married Filing Separately is $125,000, and Single or Head of Household is $200,000.
Individuals who have for the tax year (a) MAGI that’s over an applicable threshold amount, and (b) net investment income, must pay 3.8% of the smaller of (a) or (b) as their NIIT.
2019 Instructions for Form 8960, Net Investment Income Tax (IRS)
When Form 8960 has to be attached
Form 8960 must be attached to your tax return when your modified adjusted gross income (MAGI) exceeds the applicable threshold amount for your filing status. This filing requirement is separate from whether you actually owe tax. Even if your net investment income is zero or your tax liability would be minimal, you must file Form 8960 if your MAGI is above the threshold. The form is used to calculate the Net Investment Income Tax, which is 3.8% of the smaller of your excess MAGI or your net investment income. Filing the form ensures the IRS can verify your calculation and determine whether any tax is due.
Who Must File Attach Form 8960 to your return if your modified adjusted gross income (MAGI) is greater than the applicable threshold amount.
2019 Instructions for Form 8960, Net Investment Income Tax (IRS)
The tax does not reach a nonresident alien
The 3.8% Net Investment Income Tax does not apply to nonresident aliens. If you are not a U.S. citizen or resident for tax purposes, you are not subject to this tax regardless of your investment income or MAGI. However, special rules apply if you are a U.S. citizen or resident married to a nonresident alien. In that case, your filing status is treated as married filing separately for purposes of determining your MAGI, net investment income, and whether you owe the tax. There are certain elections available that may allow you to file jointly with a nonresident alien spouse, which could affect your tax calculation. The nonresident alien exemption is straightforward: if you are not a U.S. resident for tax purposes, the NIIT does not reach you.
Nonresidents. The NIIT doesn’t apply to nonresident alien (NRA) individuals. If you’re a U.S. citizen or resident married to an NRA, your filing status will be married filing separately for purposes of determining your MAGI, net investment income, and whether you’re subject to the NIIT. However, see information, later, about certain elections to file jointly with NRA spouses.
2019 Instructions for Form 8960, Net Investment Income Tax (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2019 Instructions for Form 8960 (IRS)
- Rate
(b) net investment income, must pay 3.8% of the smaller of (a) or
- Married filing jointly
Married Filing Jointly or Qualifying Widow(er) is $250,000.
- Married filing separately
Married Filing Separately is $125,000.
- Single or head of household
Single or Head of Household is $200,000.