2024 Net Investment Income Tax Threshold
For 2024, 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 2024-01-01Source: 2024 Instructions for Form 8960 (IRS)Verified 2026-08-29
Compared with 2023
Every figure on this page is unchanged from 2023.
| Item | 2023 | 2024 | 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 subject to the Net Investment Income Tax under Internal Revenue Code section 1411 for the 2024 tax year.
What changed this year, and why
The 2024 Net Investment Income Tax (NIIT) thresholds and rate, as published by the IRS in the Instructions for Form 8960.
Common questions
- What is the Net Investment Income Tax rate for 2024?
- The NIIT rate is 3.8% for 2024. It applies to the lesser of your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds the applicable threshold for your filing status.
- What are the 2024 NIIT income thresholds by filing status?
- For 2024, the threshold amounts are: $250,000 for married filing jointly or qualifying surviving spouse; $125,000 for married filing separately; and $200,000 for single or head of household.
Every amount on this page is a published figure rather than yours. The Net Investment Income Tax calculator takes the number you enter and works it out against them, showing which published figure it used.
What the 3.8% is actually charged on
The 3.8% Net Investment Income Tax applies to specific types of investment-related income. Net investment income generally includes gross income from interest, dividends, annuities, royalties, and rents, unless these amounts come from the ordinary course of a trade or business that is neither a passive activity nor a trading business. The tax also captures other gross income from passive activities or trading businesses, plus net gain from disposing of property (to the extent included in taxable income), unless that property is held in a non-passive, non-trading trade or business. In short, most investment returns - interest, dividends, rental income, capital gains - are caught, while income earned in the ordinary course of an active business typically falls outside the definition.
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.
2024 Instructions for Form 8960, Net Investment Income Tax (IRS)
Wages, Social Security and retirement income are outside it
The 3.8% Net Investment Income Tax does not apply to all money a taxpayer receives. The law excludes certain categories entirely from the definition of net investment income. First, any income that is already excluded from gross income under the Internal Revenue Code is excluded here too. Second, items that are simply not part of the net investment income definition are excluded. Third, specific items that section 1411 or related regulations carve out are also excluded. In practice, this means wages, unemployment compensation, Alaska Permanent Fund Dividends, alimony, Social Security benefits, tax-exempt interest, qualified retirement plan distributions, and income subject to self-employment taxes all fall outside the tax. The result is a clear dividing line: compensation for work and government benefit payments escape the 3.8% rate entirely, while the tax falls on passive investment returns such as interest, dividends, rents, royalties, and capital gains.
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. Examples of excluded items are: • Wages, • Unemployment compensation, • Alaska Permanent Fund Dividends, • Alimony, • Social security benefits, • Tax-exempt interest income, • Income from certain qualified retirement plan distributions, and • Income subject to self-employment taxes.
2024 Instructions for Form 8960, Net Investment Income Tax (IRS)
You are taxed on the smaller of two amounts
Even if your modified adjusted gross income exceeds the applicable threshold, you do not simply pay 3.8% on every dollar above that line. The statute limits the tax base to the lesser of two figures: your actual net investment income for the year, or the amount by which your MAGI exceeds the threshold for your filing status. The thresholds are $250,000 for married filing jointly or qualifying surviving spouse, $125,000 for married filing separately, and $200,000 for single or head of household. If a taxpayer's MAGI is only slightly above the threshold but their net investment income is large, the tax applies only to the modest MAGI excess. Conversely, if net investment income is small relative to the MAGI excess, the tax applies only to that smaller investment amount. The rule prevents taxpayers with large investment portfolios but modest above-threshold income from being taxed on amounts that fall within the threshold shelter, and likewise prevents those with thin investment returns but high total income from paying the tax on ordinary earned dollars.
The applicable threshold amount is based on your filing status. • Married Filing Jointly or Qualifying Surviving Spouse is $250,000. • Married Filing Separately is $125,000. • Single or Head of Household is $200,000.
2024 Instructions for Form 8960, Net Investment Income Tax (IRS)
When Form 8960 has to be attached
The filing trigger is straightforward: if your modified adjusted gross income for the year exceeds the threshold that corresponds to your filing status, you must attach Form 8960 to your return, even if you ultimately owe little or no tax. The threshold amounts themselves vary - Married Filing Jointly or Qualifying Surviving Spouse filers cross the line at $250,000, those Married Filing Separately at $125,000, and Single or Head of Household filers at $200,000. Once MAGI is above the relevant figure, the form is required regardless of how little net investment income you may have. The form walks you through the computation of the tax, which is 3.8% of the smaller of your net investment income or the MAGI excess over the threshold. Taxpayers whose MAGI stays at or below their threshold have no filing obligation under this provision, even if they received substantial dividends or capital gains during the year.
Who Must File Attach Form 8960 to your return if your modified adjusted gross income (MAGI) is greater than the applicable threshold amount.
2024 Instructions for Form 8960, Net Investment Income Tax (IRS)
The tax does not reach a nonresident alien
A nonresident alien individual is entirely outside the scope of the Net Investment Income Tax. If you hold NRA status for the tax year, the 3.8% rate does not apply to any of your investment receipts, regardless of the amount. The complication arises in mixed-status marriages: when a U.S. citizen or resident is married to an NRA and the couple cannot or does not elect to file a joint return, the U.S. spouse's filing status defaults to married filing separately, which carries the lowest threshold of $125,000. That lower threshold can pull the U.S. spouse into the tax even though the couple's combined worldwide income might otherwise have been sheltered under a joint filing. Certain elections may allow the couple to treat the NRA spouse as a resident for filing purposes, potentially restoring the more favorable $250,000 joint threshold. Dual-resident individuals are generally treated as U.S. residents for NIIT purposes, though special rules may treat them as NRAs under particular circumstances.
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.
2024 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.
2024 Instructions for Form 8960 (IRS)
- Rate
must pay 3.8% of the smaller of (a) or
- Married filing jointly
Married Filing Jointly or Qualifying Surviving Spouse 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.