What is the Medicare surtax rate applied to high-income individuals on net investment income?

The Medicare surtax rate on net investment income for high-income individuals is set at 3.8%. This surtax is imposed in addition to the standard income and capital gains taxes and applies to taxpayers with modified adjusted gross income above a certain threshold. For single filers, the threshold is $200,000, while for married couples filing jointly, it is $250,000. This surtax was introduced as part of the Affordable Care Act to help fund Medicare and is specifically applied to net investment income, which includes things like dividends, interest, capital gains, and rental income. The rate effectively increases the tax burden on higher earners with significant investment income, aiming to ensure that those with greater financial capabilities contribute more to the healthcare system.