Revenue from the 3.8% Net Investment Income Tax would be redirected into the Medicare Hospital Insurance Trust Fund instead of the general Treasury, helping shore up Medicare's finances. The bill also expands what counts as investment income for high earners by closing exemptions for pass-through business income. The expansion phases in for individuals earning above $400,000 (or $500,000 for joint filers), reaching full effect $100,000 above those thresholds. Changes apply to tax years beginning after December 31, 2025.
Average Household Impact
- Medicare Hospital Insurance Trust Fund — Receives Net Investment Income Tax revenue
Corporate Benefits
- Net Investment Income Tax — Expanded to cover pass-through business income above $400K/$500K
Congressional Summary
Assuring Medicare’s Promise Act of 2025This bill increases the net investment tax for certain taxpayers and appropriates revenue from the net investment tax to the Federal Hospital Insurance Trust Fund (which finances Medicare Part A). The bill also requires the Internal Revenue Service (IRS) to issue additional guidance on the net investment tax.The bill requires individuals with a modified adjusted gross income (MAGI) exceeding $400,000 ($500,000 for joint filers and $250,000 for married individuals filing separately), estates, and trusts to pay a tax of 3.8% on the greater of their specified net income or net investment income, subject to limitations. (Under current law, individuals with a MAGI exceeding $200,000 [or $250,000 for joint filers], estates, and trusts pay a 3.8% tax on net investment income.)The bill defines specified net income by expanding the definition of net investment income toinclude gross income from any trade or business (unless subject to employment taxes), including interest, dividends, annuities, royalties, and rents;include net gain from the disposition of business property;eliminate the exclusion of income from the investment of working capital; andeliminate the exception related to certain active partnership or S corporation interests.The bill alsoexpands the net investment tax definition of a trade or business,disallows net operating losses in calculating net investment income, includes certain foreign-sourced income in net investment income, andrequires the IRS to issue guidance on the treatment of certain corporate distributions for purposes of the net investment tax.
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-01-22
- Date Added
- 2026-05-20
- Source
- Congress.gov →
Like reading a bill in plain English?
We're building an app that does this for every bill in Congress and lets you tell your reps how you want them to vote. We're a small team getting ready to launch, and we're trying to show investors that real people want this. Be one of them. Help us get it built. Leave your email and we'll tell you the moment the app is ready.