The American Institute of CPAs, along with the Virgin Islands Society of CPAs and the Guam Society of CPAs, have submitted a letter to Congress asking for clarification on whether the Net Investment Income Tax, which was included as part of the Affordable Care Act, applies to bona fide residents of the U.S. Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands.

Under the “mirror code” system of taxation, the substantive provisions of the Tax Code are generally applicable as the income tax laws of the U.S. Virgin Islands, Guam and the Mariana Islands, but CPAs are wondering whether that’s the case with the Net Investment Income Tax. The NIIT is imposed by section 1411 of the Tax Code, which was added by the health care reform law. The NIIT applies at a rate of 3.8 percent to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts of $250,000 for married filing jointly taxpayers. $125,000 for married filing separately taxpayers and $200,000 for singles.

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