The Internal Revenue Service would like to remind individuals about the Additional Medicare Tax. Some taxpayers may be required to pay an Additional Medicare Tax if their income is over a certain limit.
Information explaining the Additional Medicate Tax is provided below.
- Tax Rate. The Additional Medicare Tax rate is 0.9 percent.
- Income Subject to Tax. The tax applies to the amount of wages, self-employment income and railroad retirement (RRTA) compensation that is more than a threshold amount.
- Threshold Amount. Filing status determines the threshold amount. For those who are married and file a joint return, they must combine the wages, compensation or self-employment income of their spouse with their own. The combined total income determines if it is over the threshold for this tax. The threshold amounts are:
|
Filing Status
|
Threshold Amount
|
|
Married filing jointly
|
$250,000
|
|
Married filing separately
|
$125,000
|
|
Single
|
$200,000
|
|
Head of household
|
$200,000
|
|
Qualifying widow(er) with dependent child
|
$200,000
|
- Withholding / Estimated Tax. Employers must withhold this tax from wages or compensation when employees are paid more than $200,000 in a calendar year. Self-employed taxpayers should include it for estimated tax liability purposes.
- Underpayment of Estimated Tax. Individuals who had too little tax withheld or did not pay enough estimated tax may owe an estimated tax penalty.
IRS Publication 505, Tax Withholding and Estimated Tax, provides rules and details on estimated taxes.
Individuals who owe this tax should file Form 8959, with their tax return, reporting any Additional Medicare Tax withheld by their employer(s).
Forms and publications are available on IRS.gov/forms anytime.
For more information, go to Questions and Answers for the Additional Medicare Tax.