Application to Individuals

U.S. citizens and residents. Individuals who have for the tax year (a) MAGI that’s over an applicable threshold amount, and (b) NII, must pay 3.8% of the smaller of (a) or (b) as their NIIT.

The applicable threshold amount is based on your filing status.

• You file Form 1040-NR, U.S. Nonresident Alien Income Tax Return, and Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), as provided in Regulations section 301.7701(b)-7(b).

Dual-status individual. If you were a dual-status individual—that is, an individual who was a resident of the United States for part of the year and an NRA for the other part of the year—you’re subject to the NIIT only for the portion of the year you were a U.S. resident. The relevant threshold amount isn’t reduced or prorated for a dual-status individual.

• 6013(h) (where at least one spouse was an NRA at the beginning of the tax year, but is a U.S. citizen or resident married to a U.S. citizen or resident at the end of the tax year), you can also elect to apply the joint return election for NIIT purposes. The election must be made for the first tax year in which the U.S. taxpayer is subject to NIIT.

To make either election under section 6013(g) or section 6013(h), for NIIT purposes, use your combined items of income, gain, loss, and deduction from your joint return to figure your NII and MAGI; use the married filing jointly return applicable threshold amount ($250,000); and check the appropriate checkbox near the top of Form 8960, Part I.

Once you make either election, its duration and termination are governed by sections 6013(g) and 6013(h), respectively, and related regulations.

You can make either election on an amended return only if the tax year for which you’re making the election, and all tax years affected by the election, aren’t closed by the period of limitations on assessment under section 6501. The election is effective for the year made and all subsequent years until revoked, terminated, or suspended.

Either spouse can revoke the election. If either spouse dies, termination occurs but is delayed if the surviving spouse qualifies as a qualifying surviving spouse entitled to use the joint return rates under section 6013(g)(4)(B). Termination occurs if the spouses become legally separated or divorced. If neither spouse is a U.S. citizen or resident at any time during a later tax year, suspension occurs.

If you were a U.S. resident on the last day of the tax year, file Form 1040 or 1040-SR and attach a statement showing your income for the part of the year you were a nonresident. You can use Form 1040-NR as the statement.

If you were a nonresident on the last day of the tax year, file Form 1040-NR and attach a statement showing your income for the part of the year you were a U.S. resident. You can use Form 1040 or 1040-SR as the statement.

For more information, see the Instructions for Form 1040-NR and Pub. 519, U.S. Tax Guide for Aliens.

Election To File Jointly With Nonresident Spouse—Section 6013(g) or 6013(h) If you and your spouse elect to file a joint return under section:

• 6013(g) (where an NRA is married to a U.S. citizen or resident at the end of the tax year); or

• Married filing jointly or Qualifying surviving spouse is $250,000.

• Married filing separately is $125,000.

• Single or Head of household is $200,000.

Nonresidents. The NIIT doesn’t apply to nonresident alien (NRA) individuals. If you’re a U.S. citizen or resident married to an NRA, your filing status will be married filing separately for purposes of determining your MAGI, NII, and whether you’re subject to the NIIT. However, see Election To File Jointly With Nonresident Spouse , later, about certain elections to file jointly with an NRA spouse.

Dual-resident individual. If you’re a dual-resident individual, within the meaning of Regulations section 301.7701(b)-7(a)(1), you’ll generally be treated as a U.S. resident for purposes of the NIIT. However, you’ll be treated as an NRA for purposes of the NIIT if:

• You determine you would be treated as a resident of a foreign country for purposes of an income tax treaty between the United States and that foreign country;

• You elect to be treated as a resident of the foreign country for purposes of computing your U.S. income tax liability; and

2 Instructions for Form 8960 (2025)

The IRS can terminate the election if either spouse fails to keep required books and records or denies access to applicable books and records, or fails to submit other requested information relative to the correct amount of tax.

If you elect to apply a section 6013(g) election for NIIT purposes and later determine that you didn’t meet the criteria for doing so in that tax year, your election for NIIT purposes will have no effect that year and for all future years. However, if, in a later year, you meet the criteria to elect to apply your section 6013(g) election for NIIT purposes, you’ll be treated as though you did elect to apply your section 6013(g) election in that later year unless you file (or amend) your return for that later year to report your NIIT without the election for NIIT purposes.

Filing separately with nonresident spouse for NIIT purposes. If you made a section 6013(g) or 6013(h) election to file a joint return for regular income tax purposes, but don’t elect to apply the joint return election for NIIT purposes, then, for NIIT purposes, you’ll be treated under the default method as married filing separately. Default treatment for a U.S. citizen or resident married to an NRA treats the U.S. citizen as married filing separately for purposes of the NIIT. The U.S. citizen or resident spouse figures his or her NII and MAGI separately and uses the applicable threshold for married filing separately ($125,000).