Tax guide
Net Investment Income Tax (NIIT) 3.8% on capital gains
Updated 2026-08-18 · Educational only — not tax advice
The Net Investment Income Tax is an additional 3.8% federal tax under IRC Section 1411. It can apply to capital gains, dividends, and other net investment income when modified adjusted gross income exceeds $200,000 for single and head of household filers, $250,000 for married filing jointly, or $125,000 for married filing separately.
NIIT stacks on top of regular capital gains tax. A taxpayer already in the 20% long-term bracket can see a 23.8% combined federal rate on the portion of gain that is also net investment income. Short-term gains can face ordinary rates plus 3.8% NIIT.
How to estimate NIIT
NIIT is reported on Form 8960. The calculation uses the lesser of net investment income or the MAGI overage above the threshold. A large capital gain can both create NII and push MAGI over the line.
Our calculator estimates NIIT when your income plus gain suggests you clear the threshold. Confirm MAGI, excluded income, and Form 8960 instructions with a tax professional before filing.