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Does additional Medicare tax apply to net investment income?

The 0.9 percent Additional Medicare Tax applies to individuals’ wages, compensation, and self-employment income over certain thresholds, but it does not apply to income items included in Net Investment Income. For additional information on Net Investment Income Tax, see our questions and answers posted on IRS.gov.

What is a net investment income tax?

Net investment income, or the money you made from your investments, can come in several forms, including interest, dividends, capital gains and rental income, among others. Wages, unemployment compensation and Social Security benefits generally do not count as investment income Here are the income thresholds for the net investment income tax:

Do I have to pay income tax on investments?

If an individual has income from investments, the individual may be subject to net investment income tax.

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