The National Directory of Certified Public Accountants

Ask A CPA - Affordable Care Act - Small Biz

When Must An Employer Withhold Additional Medicare Tax?

The statute requires an employer to withhold Additional Medicare Tax at a rate of 0.9 %on wages it pays to an employee in excess of $200,000 in a calendar year without regard to filing status. A new line 5d has been added to Form 941. The amount withheld will be reported with regular Medicare tax on Form W-2, Box 6. Beginning January 1, 2013. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

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