The Net Investment Income Tax (“NIIT”) is an additional 3.8% tax that went into effect on January 1, 2013, on certain net investment income of individuals, estates, and trusts that have modified adjusted gross income (“MAGI”) above certain statutory threshold amounts (e.g., $250,000 for married taxpayers filing jointly, $200,000 for single taxpayers).  Net investment income includes, but is not limited to, interest, dividends, capital gains, rental and royalty income, and non-qualified annuities.  Net investment income does not include wages, unemployment compensation, Social Security Benefits, tax-exempt interest, self-employment income, or distributions from qualified plans described in Code Sections 401(a), 403(a), 403(b), 408, 408A, or 457(b), including Section 404(k) dividends distributed under an employee stock ownership plan.  Generally, an affected taxpayer owes NIIT on the lesser of the taxpayer’s net investment income or the amount by which the taxpayer’s MAGI exceeds the threshold.  The final regulations can be found here.