Medicare Funding Changes: Expanding Investment Income Tax for High Earners.
The bill amends the Social Security Act and the Internal Revenue Code to direct revenue from the Net Investment Income Tax (NIIT) to the Medicare Hospital Insurance Trust Fund. A key provision expands the NIIT base to include trade or business income for individuals with modified adjusted gross income exceeding $400,000 (single) or $500,000 (joint). These changes apply to taxable years beginning after December 31, 2025.
Key points
Revenue from the Net Investment Income Tax (NIIT) will be allocated to the Medicare Hospital Insurance Trust Fund.
The NIIT will apply to trade or business income previously excluded for taxpayers earning over $400,000 (single) or $500,000 (joint).
The amendments are effective for taxable years beginning after December 31, 2025.
Introduced
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