As a result of the Patient Protection and Affordable Care Act, effective January 1, 2013, employers will be required to withhold a 0.9% Additional Hospital Insurance Tax on High-Income Taxpayers (a.k.a., “Medicare Surtax”).
High-Income Taxpayers are defined as those with an annual income of $200,000 for individuals, $250,000 for joint filers, and $125,000 for married individuals filing separately. The increase applies only to the employee portion of the Medicare tax, though the employer is responsible for withholding and reporting.
Employers should be mindful that the law requires an employer to withhold the Additional Medicare Tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year.
Reconciliation of over or under withholding for joint filers or married individuals filing separately, is accomplished when the employee files his/her income tax return. An employee has the option to have additional Federal Income Tax withheld on Form W-4 in anticipation of meeting the wage threshold for the additional Medicare Surtax.*
High-Income Taxpayers are defined as those with an annual income of $200,000 for individuals, $250,000 for joint filers, and $125,000 for married individuals filing separately. The increase applies only to the employee portion of the Medicare tax, though the employer is responsible for withholding and reporting.
Employers should be mindful that the law requires an employer to withhold the Additional Medicare Tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year.
Reconciliation of over or under withholding for joint filers or married individuals filing separately, is accomplished when the employee files his/her income tax return. An employee has the option to have additional Federal Income Tax withheld on Form W-4 in anticipation of meeting the wage threshold for the additional Medicare Surtax.*
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