Medicare Surtax Guide (NIIT & Additional Medicare Tax)
High-income US taxpayers may be subject to two additional taxes often referred to as Medicare surtaxes: the Net Investment Income Tax (NIIT) and the Additional Medicare Tax.
1. Net Investment Income Tax (NIIT) - 3.8%
This tax applies to the lesser of:
- Your Net Investment Income, OR
- The amount your Modified Adjusted Gross Income (MAGI) exceeds the applicable threshold.
Generally, Net Investment Income includes interest, dividends, capital gains, rental and royalty income, and income from businesses that are passive activities to you. There are exclusions.
2. Additional Medicare Tax - 0.9%
This tax applies to the amount of your wages, compensation, or self-employment income that exceeds the applicable threshold.
Applicable Thresholds (for 2024 & 2025 Tax Years)
| Filing Status | Threshold Amount |
|---|---|
| Married Filing Jointly (MFJ) | $250,000 |
| Married Filing Separately (MFS) | $125,000 |
| Single, Head of Household, Qualifying Widow(er) | $200,000 |
*These thresholds are for the 2024 and 2025 tax years and may change annually. Thresholds are the same for both the NIIT and Additional Medicare Tax but apply to different income bases.
Disclaimer: This guide provides simplified, general information about US federal Medicare surtaxes. It is not exhaustive and does not cover all rules, definitions (e.g., specific inclusions/exclusions for Net Investment Income, how MAGI is calculated), or exceptions. Tax laws change annually. Consult with a qualified tax professional for accurate information and advice specific to your situation. This tool is for educational purposes only.
Estimate Medicare Surtax Impact
Enter your information below to estimate the potential impact of the 3.8% NIIT and 0.9% Additional Medicare Tax. Use $ for currency inputs.
*AGI is used as a proxy for MAGI in this tool.
*Refer to IRS guidance for a precise definition of Net Investment Income.
*This is the total of income subject to Medicare tax.
Enter your information above and click "Calculate Estimated Surtax".
Disclaimer: This tool provides a simplified estimate based on the inputs you provide and the 2024/2025 federal tax thresholds. It is **NOT** a precise tax calculation or tax advice. It uses AGI as MAGI, requires user input for complex amounts like Net Investment Income, and does not account for all tax rules or individual circumstances. Your actual tax liability may differ. Consult a qualified tax professional for accurate advice.