The National Directory of Certified Public Accountants

Ask A CPA - Affordable Care Act - Individuals

How Is The Increased Medicare Taxes On High-Income Taxpayers Calculated?

Wages are subject to a 2.9% Medicare payroll tax with the employee and employer each paying half (1.45%). There is no limit to the amount of wages that are subject to the Medicare tax. Self-employed individuals pay both halves. Beginning in 2013, there is an additional 0.9% (2.35% in total) Medicare tax that applies to wages received in excess of $250,000 for joint filers, $200,000 for single filers and $125,000 for Married filing separate filers. This additional tax will be filed on new IRS Form 8959 which will transfer to Form 1040 Line 60.

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