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🇺🇸 US · US taxNet investment income tax (NIIT)
Also called: NIIT, 3.8% tax
In one line
An additional US tax on investment income, including capital gains, for higher earners.
In plain English
On top of capital-gains tax, higher-income taxpayers owe an extra surtax on investment income such as the gain from selling shares. It's easy to forget when estimating proceeds.
If you were explaining it to a 5-year-old
If you already make a lot, there's a small extra tax sprinkled on top of the profit from selling your toy.
Why it matters when you sell
NIIT quietly raises the effective tax on a large secondary sale, so include it when you estimate what you'll actually keep.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
Primary references for this term: IRS (US tax). Our definitions are written in plain English and kept evergreen — see the glossary methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.