New Reform Requirement – Additional Medicare Tax for High Wage Earners

Posted December 19, 2012 Company News

As communicated in a previous compliance update, Health Reform requires that an additional Medicare Tax be paid by individuals’ whose wages, other compensation and self employment income exceed a certain threshold. The additional Medicare Tax that goes into effect for tax year 2013 is 0.9%.

Filing Status and Thresholds for Additional Tax:

Dec   b   medicare tax IRS Table

The statute requires an employer to withhold Additional Medicare Tax on wages it pays to an employee in excess of $200,000 in a calendar year, beginning January 1, 2013. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax because, for example, the employee’s wages together with that of his or her spouse do not exceed the $250,000 threshold for joint return filers. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

The IRS has published a Q&A to help employers to understand this new tax and their obligations to remit the .9% for certain high wage earners.

IRS Q&A can be found at:




Please note that the information contained in this document is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This document should be reviewed by your legal counsel or tax consultant before use.

Additionally, the messages and content within the Pittsburgh Health Care Reform group do not reflect the advisory services of Henderson Brothers, Inc.


Contributing EXPERT: Shari Herrle


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