Net Investment Income Tax · Also called: 3.8% Medicare surtax
A 3.8% tax on the lesser of your net investment income or the amount by which MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). The thresholds are not indexed.
Investment income includes interest, dividends, capital gains, rents and non-qualified annuity income. IRA and 401(k) distributions and Roth conversions are not investment income, but they raise MAGI and can expose investment income to the tax.
Municipal bond interest is excluded from the tax.