Updated October 28, 2026. Quick answer: The Net Investment Income Tax is 3.8% in 2027, charged on the smaller of net investment income or the amount by which modified adjusted gross income exceeds $200,000, or $250,000 on a joint return. The thresholds are written into the statute as fixed dollar amounts with no inflation adjustment, so they are unchanged from 2026.
The rate and the threshold
Section 1411(a)(1) of the Internal Revenue Code imposes “a tax equal to 3.8 percent of the lesser of” two amounts: the taxpayer’s net investment income for the year, or the excess of modified adjusted gross income over the threshold amount. The tax is in addition to the regular income tax, and it applies whichever amount is smaller.
| Filing status | Threshold amount for the 3.8% tax |
|---|---|
| Married filing jointly, or a surviving spouse | $250,000 |
| Single, head of household and all others | $200,000 |
| Married filing separately | $125,000 (computed: half of $250,000) |
The statute defines the threshold in subsection (b): “in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $250,000”, one half of that amount for a married taxpayer filing a separate return, and $200,000 in any other case. One half of $250,000 is $125,000 (computed).
What counts as net investment income
The statute starts from “gross income from interest, dividends, annuities, royalties, and rents” other than income derived in the ordinary course of certain trades or businesses, adds net gain from disposing of property that is not held in such a business, and subtracts the deductions properly allocable to that income and gain. Wages are not on that list.
Why 2027 is the same as 2026
Section 1411 states the $250,000 and $200,000 amounts as flat dollars and does not contain a cost-of-living adjustment, so the IRS does not publish a new figure each year. Compare the income tax brackets, which move every year and are on the 2027 tax brackets page. The 2026 page is Net Investment Income Tax 2026.
Where it shows up on a return
Line-by-line walk-throughs are on Form 8960 and Schedule 2 line 12. Short-term gains are investment income and also pay the ordinary rate: short-term capital gains tax rate 2027. A separate 0.9% tax on high wages is on the Additional Medicare Tax page.
Common mistakes
- Assuming the 3.8% applies to all investment income. It applies to the smaller of net investment income or the income above the threshold.
- Using the Additional Medicare Tax thresholds for the wrong tax. The numbers happen to match, but they are separate taxes with separate rules.
- Waiting for an inflation update. There is none, because the statute fixes the dollar amounts.
Related: Net Investment Income Tax 2026, Form 8960, 2027 long-term capital gains brackets, short-term capital gains tax rate 2027, and the 2027 tax numbers.
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Answer againSources
- 26 U.S.C. 1411, Imposition of tax (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
- 26 U.S.C. 3101, Rate of tax (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
Read from the primary documents linked above on October 28, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.