Find out if Additional Medicare Tax applies to you
As of January 1, 2013, you’re liable for a 0.9 percent Additional Medicare Tax on your wages, Railroad Retirement Tax Act compensation, and self-employment income — combined with your spouse’s wages, RRTA compensation, and self-employment income if filing a joint return — that exceed the threshold amount for your filing status: Filing Status Threshold Amount
|Filing Status||Threshold Amount|
|Married filing jointly||$250,000|
|Married filing separately||$125,000|
|Head of household (with qualifying person)||$200,000|
|Qualifying widow(er) with child||$200,000|
You must combine wages and self-employment income to determine if your income exceeds the threshold amount based on your filing status. A self-employment loss should not be considered for purposes of this tax. RRTA compensation should be separately compared to the threshold.
Your employer has a responsibility to withhold Additional Medicare Tax on wages it pays to you in excess of $200,000 in a calendar year, without regard to your filing status, wages paid to you by another employer, or income that you may have from other sources.
Your employer does not combine the wages for married couples to determine whether to withhold Additional Medicare Tax. If you also have self-employment income, your employer does not consider that income – or that of your spouse - in determining whether to withhold Additional Medicare Tax.
Because your employer considers only the wage it pays, you may owe more Additional Medicare Tax than your employer withholds, depending on your filing status, other wages, RRTA compensation and self-employment income.
Too little withholding or failure to pay enough quarterly estimated taxes could lead to an estimated tax penalty. If you think you will owe more than the amount of tax withheld from your paycheck, you can make up the difference by making estimated tax payments and/or by requesting additional income tax withholding using Form W-4, Employee's Withholding Allowance Certificate.
If you are liable for Additional Medicare Tax, you will calculate it on your individual income tax return using Form 8959, Additional Medicare Tax. Any Additional Medicare Tax withheld by your employer will also be reported on Form 8959 and applied against all taxes shown on your income tax return, including any Additional Medicare Tax liability.
You can find additional information on Additional Medicare Tax, including questions and answers, on IRS.gov by entering “Additional Medicare Tax” in the search box. For more information about withholding and estimated tax payments, read IRS Publication 505, Tax Withholding and Estimated Tax.
Tools to help
• Use the IRS Withholding Calculator tool available on IRS.gov to calculate your withholding.
• Give Withholding and Payments a Check-up to Avoid a Tax Surprise
• IRS.gov/aca (Search Additional Medicare Tax)