Fill out Form 8960 (Net Investment Income Tax - Individuals, Estates, and Trusts) online
Form 8960 is used to calculate the Net Investment Income Tax (NIIT), a 3.8% surtax on investment income for individuals, estates, and trusts whose modified adjusted gross income exceeds certain thresholds. Investment income includes interest, dividends, capital gains, rental income, and royalties.
How to fill out Form 8960 (Net Investment Income Tax - Individuals, Estates, and Trusts)
Calculate net investment income
In Part I, list all investment income: taxable interest, dividends, annuities, rental and royalty income, capital gains, and other investment income. Subtract allowable investment expenses to arrive at net investment income on line 8.
Determine modified adjusted gross income
In Part II, enter your modified adjusted gross income (MAGI) from Form 1040. Subtract the applicable threshold ($200,000 single, $250,000 MFJ, $125,000 MFS) to calculate the excess MAGI.
Calculate the Net Investment Income Tax
The NIIT is 3.8% of the lesser of your net investment income or the amount by which your MAGI exceeds the threshold. Enter the result on line 17.
Report on your tax return
Transfer the NIIT amount to Schedule 2 (Additional Taxes), line 23. This tax is in addition to your regular income tax and any Additional Medicare Tax from Form 8959.
About Form 8960 (Net Investment Income Tax - Individuals, Estates, and Trusts)
Who needs this form
Individuals with modified adjusted gross income exceeding $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately) who also have net investment income. Estates and trusts are subject to the tax on the lesser of undistributed net investment income or adjusted gross income exceeding the threshold for the highest tax bracket.
Where to submit
Attach Form 8960 to your Form 1040 or 1040-SR when filing your annual federal income tax return. The tax is reported on Schedule 2, line 23.
Source and content freshness
- Reviewed: 2026-02-24
- Filing deadlines may shift for weekends and holidays. Verify due dates with official instructions.
Common mistakes to avoid
- Including wages or self-employment income as investment income (these are not subject to NIIT)
- Forgetting to include rental income and capital gains from the sale of investment property in net investment income
- Not properly deducting investment expenses that are allocable to investment income
- Confusing the NIIT with the Additional Medicare Tax on Form 8959 (they use the same thresholds but apply to different types of income)
Frequently asked questions
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Is the Net Investment Income Tax in addition to capital gains tax?
Yes. The 3.8% NIIT is imposed on top of any other taxes on investment income, including the long-term capital gains rate (0%, 15%, or 20%). For example, a taxpayer in the highest bracket could pay 20% capital gains tax plus 3.8% NIIT for a combined rate of 23.8% on long-term capital gains.
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