The surtax has come to be referred to as the “Net Investment Income Tax (NIIT).” Although passed as part of the Affordable Care Act, the tax goes to the government’s general fund. This tax is imposed on individuals, estates, and trusts.

For years 2018 through 2025, investment expenses formerly claimed on Schedule A as a Tier 2 miscellaneous deduction are not deductible. Thus, these types of investment expenses are not deductible in determining NII for those years, and not being able to deduct these investment expenses in determining NII will essentially increase NII, and as a result, the surtax on NII.