The Additional Medicare Tax is a tax imposed on high-income earners to help fund Medicare. It applies to wages, self-employment income, and railroad retirement (RRTA) compensation above certain thresholds.
5 Must Know Facts For Your Next Test
The Additional Medicare Tax rate is 0.9%.
The threshold for the tax differs based on filing status: $250,000 for married couples filing jointly, $200,000 for single filers, and $125,000 for married individuals filing separately.
Employers are required to withhold the Additional Medicare Tax from wages exceeding $200,000 in a calendar year.
Self-employed individuals must include this tax when calculating their estimated taxes.
Unlike regular Medicare tax, there is no employer match for the Additional Medicare Tax.
Review Questions
What is the rate of the Additional Medicare Tax?
At what income level does an employer start withholding the Additional Medicare Tax?
Is there an employer match for the Additional Medicare Tax?
Related terms
Medicare Tax: A payroll tax that funds the U.S. government’s Medicare program.
FICA Taxes: Federal Insurance Contributions Act taxes that include Social Security and regular Medicare taxes.
Self-Employment Tax: A tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves.