Public conceptFinish the estimate
Net Investment Income Tax
A 3.8% tax that can apply to the smaller of net investment income or modified adjusted gross income above a filing-status threshold.
In one sentence
NIIT is a separate investment-income calculation added after regular income tax.
Model
min(net investment income, MAGI excess) × 3.8%
Worked example
If estimated MAGI is $12,000 above the threshold but net investment income is $20,000, this scoped model applies 3.8% to $12,000.
What to notice
Follow this mechanism in a related lesson, where the same calculator engine exposes every intermediate value.
Common misconception
Crossing the threshold does not apply NIIT to every dollar of income, and this estimator's MAGI is simplified.
See it in motion