Additional Medicare Tax.
In plain English
The additional Medicare tax is an extra 0.9% tax on the part of your wages or self-employment income that goes above a fixed threshold. It is on top of the regular 1.45% Medicare tax that comes out of every paycheck. Employers must start withholding the extra 0.9% once your pay with that employer passes $200,000, regardless of your filing status, so the final amount you actually owe is settled on your tax return. The thresholds are set by law and are not indexed for inflation.
01Why it matters
Because your employer withholds based on a flat $200,000 trigger but your real threshold depends on filing status, two-income married couples sometimes owe more at tax time and single high earners sometimes get a bit back.
02The math, step by step
The thresholds are $200,000 for single filers and $250,000 for married filing jointly. If you are single and earn $230,000 in wages, the extra 0.9% applies to the $30,000 above $200,000, which is $270. Your employer will have already withheld most of it once your pay crossed $200,000.
03What this is NOT
The additional Medicare tax hits earned income (wages and self-employment). The net investment income tax is a separate 3.8% on investment income. They share the same thresholds but apply to different money.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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