What is the Additional Medicare Tax?

The Additional Medicare Tax that may appear as a deduction on your paystub was established by the Affordable Care Act. It became effective in 2013. The rate of the Medicare tax is 2.9%. It applies only to wages and compensation (plus tips), as well as qualifying railroad retirement (RRTA) compensation.

As an employee, you are responsible for 1.45% of the tax. Your employer pays the other 1.45%. Some taxpayers considered “high wage earners,” are liable for an additional 0.9% of Additional Medicare Tax, if their income exceeds certain thresholds. Income thresholds are based on the IRS filing status as shown below. If filing as “Married filing jointly,” remember that the threshold applies to the combined wages, self-employment and/or RRTA compensation of both taxpayers.

IRS Filing Status Threshold amount for the Additional Medicare Tax
Married filing jointly $250,000
Married filing separately $125,000
Single $200,000
Head of household $200,000
Qualifying widow(er) with dependent child $200,000

If you owe this tax, you should file IRS Form 8959 with your tax return. Visit IRS.gov for more information and guidance on the Additional Medicare Tax.

Return to the Medicare FAQ section to view more answers to other commonly asked questions about Medicare prescription drug coverage.