When You Owe the Additional Medicare Tax

There are certain taxpayers who, depending on their income, may owe an Additional Tax. If this applies to you, it’s important to be aware of certain facts to make tax time simpler.

  • The rate is 9%.
  • The tax is assessed when your income exceeds a specified threshold. Medicare wages, self-employment income, and railroad retirement compensation is included in the calculation of these limits. All income is combined, both regular and self-employment to calculate the tax, and you don’t take into account any loss from self-employment. Form 8959, Additional Medicare Tax, has more information.
  • The are based on your filing status. If you file a joint return with your spouse, you will combine both of your wages and income, using the total of both to compare against set .
  • Married filing jointly – $250,000
  • Married filing separately – $125,000
  • Single – $200,000
  • Head of Household – $200,000
  • Qualifying widow(er) with dependent – $200,000
  • Your employer is responsible for withholding the additional Medicare tax from wages you earn that exceed $200,000 in a calendar year. You’ll need to figure this out when you calculate your estimated if you are self-employed.
  • If you didn’t pay enough in taxes or had too little withheld, you may have to pay a penalty.
  • If you owe the tax, you’ll need to file Form 8959 with your regular Form 1040. IF your employer withheld the tax automatically, you can report that on the Form 8959 as well.