Medicare Tax law generally. The new Medicare Tax law (I.R.C. § 1411) was added to the Internal Revenue Code by the Health Care and Education Reconciliation Act of 2010, in part to offset some of the costs of Obamacare. Very generally, the tax is imposed on an individual’s unearned income (i.e., net investment income including, in part, net income from rents and a trade or business that is a passive activity with respect to the taxpayer). The tax does not apply to an individual who either (1) has no net investment income for the year, or (2) has modified adjusted …