The Net Investment Income Tax (NIIT) is a 3.8% tax on a broad range of income sources, such as interest; dividends; capital gains; rental and royalty income; non-qualified annuities; and passive business revenue. It affects individuals, estate and trusts above certain income levels.
When the AMT is triggered, the taxpayer must add back certain non-taxable income, loses certain exemptions and deductions, and must recalculate their tax at an established flat rate. They will pay the higher of the two amounts. If you paid AMT last year but do not owe it now, you may be eligible for a credit.