Application of Social Security tax to net investment income

(a) In general Section 1411(a)(1) of the Internal Revenue Code of 1986 is amended by striking 3.8 percent and all that follows and inserting the sum of— (A) 3.8 percent of the lesser of— (i) net investment income for such taxable year, or (ii) the excess (if any) of— (I) the modified adjusted gross income for such taxable year, over (II) the medicare contribution threshold amount, plus (B) 12.4 percent of the lesser of— (i) net investment income for such taxable year, or (ii) the excess (if any) of— (I) the modified adjusted gross income for such taxable year, over (II) the social security contribution threshold amount.. (b) Application to estates and trusts Section 1411(a)(2) of such Code is amended by striking 3.8 percent and all that follows and inserting the sum of— (A) 3.8 percent of the lesser of— (i) the undistributed net investment income for such taxable year, or (ii) the excess (if any) of— (I) the adjusted gross income (as defined in section 67(e)) for such taxable year, over (II) the dollar amount at which the highest tax bracket in section 1(e) begins for such taxable year, plus (B) 12.4 percent of the lesser of— (i) the amount described in subparagraph (A)(i), or (ii) the excess described in subparagraph (A)(ii).. (c) Threshold amounts Section 1411(b) of such Code is amended to read as follows: (b) Threshold amounts For purposes of this section— (1) Medicare contribution threshold amount The term medicare contribution threshold amount means— (A) in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $250,000, (B) in the case of a married taxpayer (as defined in section 7703) filing a separate return, ½ of the dollar amount determined under subparagraph (A), and (C) in any other case, $200,000. (2) Social security contribution threshold amount The term social security contribution threshold amount means $400,000.. (d) Clerical amendment The heading of chapter 2A of such Code (and the item relating to such chapter in the table of chapters for subtitle A of chapter 1 of such Code) are each amended by striking medicare contribution and inserting contributions. (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2026.