This tax form is used to calculate and report your Net Investment Income Tax (NIIT), and any additional tax imposed on certain individuals, estates, and trusts with investment income.
Here are a few important points:
- Purpose of the tax: The Net Investment Income Tax (NIIT) was introduced as part of the Affordable Care Act (ACA) and is aimed at higher-income taxpayers. It applies to individuals, estates, and trusts that have certain types of investment income and meet specific income thresholds.
- Determining the tax: Form 8960 helps calculate the NIIT by determining your net investment income and applying the relevant tax rates and thresholds. Net investment income includes income from sources such as interest, dividends, capital gains, rental income, royalties, and passive business activities.
- Income thresholds: For individuals, the NIIT generally applies if your modified adjusted gross income (MAGI) exceeds specific thresholds, which are $200,000 for single filers and $250,000 for married couples filing jointly. Different thresholds may apply to estates and trusts.
- Reporting requirements: Form 8960 is used to report and calculate the NIIT. We donʻt currently support this form, but we may in the future, so check back.