Medicare Additional Tax FAQ

We have been asked a few times about the Additional Medicare tax, so we figured we would put the answers right here to save everyone some time.

What is the rate of the Additional Medicare Tax?

The rate of the Additional Medicare Tax is a flat 0.9%

When are people hit with the Additional Medicare Tax?

An individual is liable for Additional Medicare Tax if their wages, compensation, or self-employment income (together with that of his or her spouse if filing a joint return) exceed the threshold amount for their filing status:

Filing status	Threshold amount
Married filing jointly	$250,000
Married filing separate	$125,000
Single	$200,000
Head of household (with qualifying person)	$200,000
Qualifying widow(er) with dependent child	$200,000

What wages are subject to Additional Medicare Tax?

All wages currently subject to Medicare Tax that are paid in excess of the applicable threshold for a person’s filing status are subject to Additional Medicare Tax.

Are U.S. citizens living abroad subject to Additional Medicare Tax?

Yes. There are no special rules for any U.S. citizens that live abroad.

Are tips subject to Additional Medicare Tax?

Yes. Any and all tips currently subject to Medicare Tax are also subject to the Additional Medicare Tax.

When must an employer withhold Additional Medicare Tax?

An employer must withhold Additional Medicare Tax on wages it pays to an employee in excess of $200,000 in a calendar year, no matter the employee’s filing status (Single, Married filing Jointly, etc.).

This withholding obligation is required for employers even if an employee may not be liable for Additional Medicare Tax. For example, this would apply if an employee is paid between $200,000 and $250,000 but has a filing status of Married filing Jointly.

If my employer withholds Additional Medicare Tax from my wages in excess of $200,000, but I won't owe the tax because my spouse and I file a joint return and we won't meet the $250,000 threshold for joint filers, can I ask my employer to stop withholding Additional Medicare Tax?

While you are free to request this of your employer, your employer is required by law to withhold an Additional Medicare Tax from all wages in excess of $200,000 no matter the filing status of an employee.

How do I report Additional Medicare Tax when I file my tax return?

You are required to report Additional Medicare Tax on Form 8959, Additional Medicare Tax, and attach Form 8959 to your income tax return.

I have other various questions about the Additional Medicare Tax

For any additional questions regarding the Additional Medicare Tax, please consult your tax professional or CPA.

Medicare Additional Tax FAQ

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