H.R. 609 — Assuring Medicare’s Promise Act of 2025

This section directs revenues from the net investment income tax under IRC §1411 (i.e., 3.8% tax on certain net investment income of individuals, estates, and trusts with modified adjusted gross income above $200,000/$250,000 thresholds) to the Federal Hospital Insurance Trust Fund—which finances Medicare Part A hospital insurance benefits—for taxable years beginning after December 31, 2025. (Previously, the trust fund received only Medicare portions of payroll and self-employment taxes.)

This section expands the 3.8% net investment income tax (NIIT) under IRC §1411—currently applicable only to net investment income (e.g., interest, dividends, capital gains excluding active trade or business income)—to the greater of net investment income or specified net income (i.e., net investment income including certain previously excluded trade or business income) for individuals with modified adjusted gross income exceeding $400,000 ($500,000 for joint filers or surviving spouses; $250,000 for married filing separately), with the increase phased in ratably over the first $100,000 of such excess ($50,000 married filing separately). It makes a parallel change for trusts and estates, replacing "undistributed net investment income" with the greater of undistributed specified net income or undistributed net investment income. (Thus, for affected high-income taxpayers, the NIIT base expands to include income from non-passive trades or businesses and certain financial trading activities previously excluded, subject to phase-in.) The section also clarifies NIIT computation by (1) excluding from net investment income any items subject to self-employment tax under IRC §1401(b), certain U.S. wages subject to employment taxes, or foreign-earned wages from foreign employers; (2) disallowing net operating losses under IRC §172 as a deduction; and (3) including amounts includible in gross income under IRC §§951, 951A (GILTI), 1293, or 1296 (with regulatory guidance required for previously taxed income, including under IRC §962(d)). The changes apply to taxable years beginning after December 31, 2025, with transition rules for coordination of foreign income inclusions across taxable years.