You Make the Call - June 4, 2026

Question: In 2025, Maria Lopez, a single taxpayer, earns $185,000 in wages from her job. She also has $25,000 of net investment income (NII) from taxable interest, dividends and a long-term capital gain from selling stock. Her modified adjusted gross income (MAGI) is $210,000. Does Maria owe the net investment income tax (NIIT), and if so, how much? 

Answer: Yes. The NIIT applies to individuals at 3.8% of the lesser of: 

1. Taxpayer’s NII, or 
2. Amount by which the taxpayer’s MAGI exceeds the applicable threshold 

For a single filer, the threshold is $200,000.

Maria’s MAGI is $210,000, which puts her $10,000 over the statutory threshold of $200,000 for a single filer. 

The NIIT is imposed on the lesser of Maria’s $25,000 NII or her $10,000 excess MAGI, so only $10,000 is subject to the 3.8% tax.

NIIT calculation: 
$10,000 × 3.8% = $380, which is the amount Maria owes under NIIT. 

The key point is that the tax is not automatically 3.8% of all investment income. It applies only to the lesser of NII or the amount by which MAGI exceeds the statutory threshold. For Maria, her NII is $25,000, but only $10,000 is exposed to NIIT because her MAGI exceeds the single-filer threshold by only $10,000.