When You Owe the Additional Medicare Tax

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

  • The Additional Medicare Tax rate is 9%.
  • The tax is assessed when your income exceeds a specified threshold. Medicare wages, self-employment income, and railroad retirement 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 , you will combine both of your wages and income, using the total of both to compare against set threshold amounts.
  • filing jointly – $250,000
  • Married filing separately – $125,000
  • – $200,000
  • – $200,000
  • Qualifying (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 taxes if you are .
  • 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 . IF your employer withheld the tax automatically, you can report that on the Form 8959 as well.