---
kind: "section"
citation: "26 U.S.C. § 1411"
title: "26"
title_heading: "Internal Revenue Code"
number: "1411"
heading: "Imposition of tax"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/1411"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 2A — Unearned Income Medicare Contribution"
---

# §1411. Imposition of tax

- (a) **In general—** Except as provided in [subsection (e)](#e)—
  - (1) **Application to individuals—** In the case of an individual, there is hereby imposed (in addition to any other tax imposed by this subtitle) for each taxable year a tax equal to 3.8 percent of the lesser of—
    - (A) net investment income for such taxable year, or
    - (B) the excess (if any) of—
      - (i) the modified [adjusted gross income](/usc/26/62.md?p=a) for such taxable year, over
      - (ii) the threshold amount.
  - (2) **Application to estates and trusts—** In the case of an [estate](/usc/26/1361.md?p=c-3) or trust, there is hereby imposed (in addition to any other tax imposed by this subtitle) for each taxable year a tax of 3.8 percent of the lesser of—
    - (A) the undistributed net investment income for such taxable year, or
    - (B) the excess (if any) of—
      - (i) the [adjusted gross income](/usc/26/62.md?p=a) (as defined in [section 67(e)](/usc/26/67.md?p=e)) for such taxable year, over
      - (ii) the dollar amount at which the highest tax bracket in [section 1(e)](/usc/26/1.md?p=e) begins for such taxable year.
- (b) **Threshold amount—** For purposes of this chapter, the term “threshold amount” means—
  - (1) in the case of a [taxpayer](/usc/26/1313.md?p=b) making a [joint return](/usc/26/62.md?p=b-3-D) under [section 6013](/usc/26/6013.md) or a [surviving spouse](/usc/26/2.md?p=a-1) (as defined in [section 2(a)](/usc/26/2.md?p=a)), $250,000,
  - (2) in the case of a married [taxpayer](/usc/26/1313.md?p=b) (as defined in [section 7703](/usc/26/7703.md)) filing a separate return, ½ of the dollar amount determined under [paragraph (1)](#b-1), and
  - (3) in any other case, $200,000.
- (c) **Net investment income—** For purposes of this chapter—
  - (1) **In general—** The term “net investment income” means the excess (if any) of—
    - (A) the sum of—
      - (i) gross income from [interest](/usc/26/856.md?p=f-1), [dividends](/usc/26/316.md?p=a), annuities, royalties, and rents, other than such income which is derived in the ordinary course of a [trade or business](/usc/26/1402.md?p=c) not described in [paragraph (2)](#c-2),
      - (ii) other gross income derived from a [trade or business](/usc/26/1402.md?p=c) described in [paragraph (2)](#c-2), and
      - (iii) net gain (to the extent taken into account in computing [taxable income](/usc/26/63.md?p=a)) attributable to the [disposition](/usc/26/424.md?p=c-1) of [property](/usc/26/317.md?p=a) other than [property](/usc/26/317.md?p=a) held in a [trade or business](/usc/26/1402.md?p=c) not described in [paragraph (2)](#c-2), over
    - (B) the deductions allowed by this subtitle which are properly allocable to such gross income or net gain.
  - (2) **Trades and businesses to which tax applies—** A [trade or business](/usc/26/1402.md?p=c) is described in this paragraph if such [trade or business](/usc/26/1402.md?p=c) is—
    - (A) a passive activity (within the meaning of [section 469](/usc/26/469.md)) with respect to the [taxpayer](/usc/26/1313.md?p=b), or
    - (B) a [trade or business](/usc/26/1402.md?p=c) of trading in financial instruments or commodities (as defined in [section 475(e)(2)](/usc/26/475.md?p=e-2)).
  - (3) **Income on investment of working capital subject to tax—** A rule similar to the rule of [section 469(e)(1)(B)](/usc/26/469.md?p=e-1-B) shall apply for purposes of this subsection.
  - (4) **Exception for certain active interests in partnerships and S corporations—** In the case of a [disposition](/usc/26/424.md?p=c-1) of an [interest](/usc/26/856.md?p=f-1) in a [partnership](/usc/26/761.md?p=a) or [S corporation](/usc/26/1361.md?p=a-1)—
    - (A) gain from such [disposition](/usc/26/424.md?p=c-1) shall be taken into account under [clause (iii)](#c-1-A-iii) of paragraph (1)(A) only to the extent of the net gain which would be so taken into account by the transferor if all [property](/usc/26/317.md?p=a) of the [partnership](/usc/26/761.md?p=a) or [S corporation](/usc/26/1361.md?p=a-1) were sold for fair market [value](/usc/26/851.md?p=c-4) immediately before the [disposition](/usc/26/424.md?p=c-1) of such [interest](/usc/26/856.md?p=f-1), and
    - (B) a rule similar to the rule of [subparagraph (A)](#c-4-A) shall apply to a loss from such [disposition](/usc/26/424.md?p=c-1).
  - (5) **Exception for distributions from qualified plans—** The term “net investment income” shall not include any distribution from a plan or arrangement described in section [401(a)](/usc/26/401.md?p=a), [403(a)](/usc/26/403.md?p=a), [403(b)](/usc/26/403.md?p=b), [408](/usc/26/408.md), [408A](/usc/26/408A.md), or [457(b)](/usc/26/457.md?p=b).
  - (6) **Special rule—** Net investment income shall not include any item taken into account in determining [self-employment income](/usc/26/1402.md?p=b) for such taxable year on which a tax is imposed by [section 1401(b)](/usc/26/1401.md?p=b).
- (d) **Modified adjusted gross income—** For purposes of this chapter, the term “modified [adjusted gross income](/usc/26/62.md?p=a)” means [adjusted gross income](/usc/26/62.md?p=a) increased by the excess of—
  - (1) the amount excluded from gross income under [section 911(a)(1)](/usc/26/911.md?p=a-1), over
  - (2) the amount of any deductions (taken into account in computing [adjusted gross income](/usc/26/62.md?p=a)) or exclusions disallowed under [section 911(d)(6)](/usc/26/911.md?p=d-6) with respect to the amounts described in [paragraph (1)](#d-1).
- (e) **Nonapplication of section—** This section shall not apply to—
  - (1) a nonresident alien, or
  - (2) a trust all of the unexpired [interests](/usc/26/856.md?p=f-1) in which are devoted to one or more of the purposes described in [section 170(c)(2)(B)](/usc/26/170.md?p=c-2-B).

## Source credit

(Added Pub. L. 111–152, title I, § 1402(a)(1), Mar. 30, 2010, 124 Stat. 1061.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 111–152, title I, § 1402(a)(4), Mar. 30, 2010, 124 Stat. 1063, provided that: “The amendments made by this subsection [enacting this chapter and amending section 6654 of this title] shall apply to taxable years beginning after December 31, 2012.”