Additional Medicare Tax

The Additional Medicare Tax which goes into effect in 2013 applies to individuals’ wages, other compensation, and self-employment income over certain thresholds.  Employers are responsible for withholding the tax on wages and other compensation in certain circumstances such as those shown below:

  1. The rate of the Additional Medicare Tax is 0.9 percent.
  2. Individuals liable for Additional Medicare Tax are those whose  individual wages, compensation, or self-employment income (together with that of a spouse if filing a joint return) exceed the threshold amount for the individual’s filing status as shown on the table below:

    Filing Status

    Threshold Amount
    Married filing jointly $250,000
    Married filing separately $125,000
    Single $200,000
    Head of household (with qualifying person) $200,000
    Qualifying widow(er) with dependent child $200,000
  3. Wages subject to Additional Medicare Tax include all wages that were previously subject to Medicare Tax if paid in excess of the applicable threshold for an individual’s filing status. For more information on what wages are subject to Medicare Tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15, (Circular E), Employer’s Tax Guide.
  4. Railroad Retirement Tax Act (RRTA) subject to Additional Medicare Tax include all RRTA compensation previously subject to Medicare Tax if paid in excess of the applicable threshold for an individual’s filing status.  All information aplicable to the application of the Additional Medicare Tax to wages also applies to RRTA compensation, unless otherwise indicated.
  5. All nonresident aliens and U.S. citizens living abroad are subject to Additional Medicare Tax. There are no special rules for nonresident aliens and U.S. citizens living abroad for purposes of this provision. Wages, other compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold.

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Roy & Associates, PC serves clients in western Pennsylvania located predominantly in Westmoreland County, Allegheny County, and Fayette County.

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