Form 8960 – Net Investment Income Tax (NIIT)

Last reviewed: 2025-10-26

Use the IRS Form 8960: Investment Income Surtax Tax Form Calculator IRS Form 8960: Investment Income Surtax as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 8960 state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Form 8960 calculates the 3.8% Net Investment Income Tax (NIIT) for individuals, estates, and trusts with income above certain thresholds. This surtax applies to passive income such as interest, dividends, capital gains, rental income, and income from businesses in which the taxpayer does not materially participate.

Who must file Form 8960? You must complete this form if:

You have net investment income and your modified adjusted gross income (MAGI) exceeds:
$250,000 for Married Filing Jointly
$125,000 for Married Filing Separately
$200,000 for Single, Head of Household, or Qualifying Widow(er)

The tax is 3.8% on the lesser of net investment income or the excess of MAGI over the applicable threshold.

Net Investment Income Tax— Individuals, Estates, and Trusts
Name(s) shown on your tax return				Your social security number or EIN
Part I. Investment Income		Section 6013(g) election (see instructions) Section 6013(h) election (see instructions) Regulations section 1.1411-10(g) election (see instructions)
1	Taxable interest (see instructions)				1
2	Ordinary dividends (see instructions)				2
3	Annuities (see instructions)				3
4a	Rental real estate, royalties, partnerships, S corporations, trusts, etc. (see instructions)		4a
b	Adjustment for net income or loss derived in the ordinary course of a non-section 1411 trade or business (see instructions)		4b
c	Combine lines 4a and 4b		4c
5a	Net gain or loss from disposition of property (see instructions)		5a
b	Net gain or loss from disposition of property that is not subject to net investment income tax (see instructions)		5b
c	Adjustment from disposition of partnership interest or S corporation stock (see instructions)		5c
d	Combine lines 5a through 5c				5d
6	Adjustments to investment income for certain CFCs and PFICs (see instructions)				6
7	Other modifications to investment income (see instructions)				7
8	Total investment income. Combine lines 1, 2, 3, 4c, 5d, 6, and 7				8
Part II. Investment Expenses Allocable to Investment Income and Modifications
9a	Investment interest expenses (see instructions)		9a
b	State, local, and foreign income tax (see instructions)		9b
c	Miscellaneous investment expenses (see instructions)		9c
d	Add lines 9a, 9b, and 9c				9d
10	Additional modifications (see instructions)				10
11	Total deductions and modifications. Add lines 9d and 10				11
Part III. Tax Computation
12	Net investment income. Subtract Part II, line 11 from Part I, line 8. Individuals complete lines 13– 17. Estates and trusts complete lines 18a–21. If zero or less, enter -0-				12
12	Individuals:				12
13	Modified adjusted gross income (see instructions)		13
14	Threshold based on filing status (see instructions)		14
15	Subtract line 14 from line 13. If zero or less, enter -0-		15
16	Enter the smaller of line 12 or line 15				16
17	Net investment income tax for individuals. Multiply line 16 by 3.8% (). Enter here and include on your tax return (see instructions)				17
17	Estates and Trusts:				17
18a	Net investment income (line 12 above)		18a
b	Deductions for distributions of net investment income and deductions under section 642(c) (see instructions)		18b
c	Undistributed net investment income. Subtract line 18b from 18a (see instructions). If zero or less, enter -0-		18c
19a	Adjusted gross income (see instructions)		19a
b	Highest tax bracket for estates and trusts for the year (see instructions)		19b
c	Subtract line 19b from line 19a. If zero or less, enter -0-		19c
20	Enter the smaller of line 18c or line 19c				20
21	Net investment income tax for estates and trusts. Multiply line 20 by 3.8% (). Enter here and include on your tax return (see instructions)				21

What counts as net investment income? It includes:

Interest and dividends (including qualified dividends)
Capital gains (including gains from the sale of property not used in a trade or business)
Rental and royalty income
Income from passive activities
Income from financial instruments and commodities

Excluded: wages, unemployment compensation, active business income, tax-exempt interest, and distributions from certain qualified plans.

Last reviewed: 2025-10-26: If you believe this form requires an update, please contact us.

Tips to reduce or manage NIIT liability

Here are strategies high-income earners can consider to limit NIIT exposure:

Invest in tax-exempt bonds or municipal interest to reduce net investment income.
Harvest capital losses to offset capital gains.
Defer capital gains through 1031 exchanges or qualified opportunity funds.
Review passive vs. active participation in partnerships to exclude business income from NIIT.
Use retirement contributions to lower your MAGI below the NIIT threshold.

Use our Form 8960 calculator to simulate your NIIT exposure. For more details, consult the official instructions and verify each type of income against IRS guidance.

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.