What do I Need to Know About Additional Medicare Tax?

There are a variety of different taxes that are imposed by the United States government that must be paid by those who are employed. This can often become overwhelming to understand, which is why it can be beneficial to retain the services of an experienced certified public accountant and consultant for guidance in understanding these matters.

What is Additional Medicare Tax?

The Additional Medicare Tax is one of the government’s payroll withholding taxes. It went into effect in 2013 and it is paid solely by employees and the self-employed. Employees do not match the Additional Medicare Tax. This tax is 0.9% of an employee’s gross pay (wages, salaries, bonuses, etc.) that are in excess of $200,000 in a year. This is in addition to the regular Medicare payroll tax and the Social Security payroll tax.

Will Additional Medicare Tax be Withheld From my Wages?

An employer is required to withhold Additional Medicare Tax from wages they pay to an employee in excess of $200,000 in a calendar year. An employee may owe more than the amount withheld by the employer depending on their filing status, wages, compensation, and self-employment income. There are different thresholds depending on the filing status. This includes the following:

  • $250,000 for those married filing jointly
  • $125,000 for those married filing separate
  • $200,000 for those filing single
  • $200,000 for the head of the household (with qualifying person)
  • $200,000 for a qualifying widow with a dependent child

It is important to know that employees cannot request additional withholding specifically for Additional Medicare Tax. However, if they anticipate liability for the tax, they may request that their employer withhold an additional amount of income tax withholding on Form W-4. This will be applied against the employee’s taxes shown on their income tax return, including any Additional Medicare Tax liability.

What is the Difference Between Medicare Tax and Additional Medicare Tax?

It is important to know that there are, in fact, differences between Medicare Tax and Additional Medicare Tax. They are not the same tax. The Medicare tax is withheld from an employee’s gross pay without limit. This is done at a rate of 1.45% of gross pay. On the other hand, the Additional Medicare Tax is only paid through payroll withholding. 


Werdann DeVito LLC is an experienced Certified Public Accountant firm serving clients throughout New Jersey with all of their financial needs. If you need quality assistance with accounting, tax, or consulting services, contact Werdann DeVito LLC today.