Tax Code Section 1411

Tax Code Section 1411 relates to the Net Investment Income Tax (NIIT), which imposes a 3.8% tax on certain investment income for higher-income individuals, estates, and trusts. Specifically, it applies to individuals with modified adjusted gross income (MAGI) exceeding $200,000 ($250,000 for married couples filing jointly). This tax affects income from interest, dividends, capital gains, rental income, and other passive investments over the threshold. The NIIT aims to help fund healthcare initiatives under the Affordable Care Act, targeting those who can afford to contribute more through their investment earnings.