NIIT – Net Investment Income Tax

Effective Jan. 1, 2013, individual taxpayers are liable for a 3.8 percent Net Investment Income Tax on the lesser of their net investment income, or the amount by which their modified adjusted gross income exceeds the statutory threshold amount based on their filing status.

The statutory threshold amounts for 2015 were:

– Married filing jointly — $250,000,

– Married filing separately — $125,000,

– Single or head of household — $200,000, or

– Qualifying widow(er) with a child — $250,000.

In general, net investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, and non-qualified annuities.

Net investment income gene­rally does not include wages, unemployment compensa­tion, Social Security Benefits, alimony, and most self-employment income. It must be paid before April 17th, even if you live abroad or you have an extension to file.