What this line means
An additional 0.9% Medicare tax on earned income above $200,000 for single filers or $250,000 for married filing jointly. This surtax applies to wages, compensation, and self-employment income that exceeds the threshold. You calculate it on Form 8959. Unlike the regular Medicare tax (which is split between employee and employer), you pay the Additional Medicare Tax entirely yourself.
Does this apply to you?
- Your wages from all jobs combined exceed $200,000 (single) or $250,000 (married filing jointly)
- Your self-employment income exceeds the threshold after combining with any W-2 wages
- You and your spouse both work and your combined wages exceed $250,000
- Your employer withheld Additional Medicare Tax from your paycheck (mandatory on wages over $200,000 from a single employer, regardless of filing status)
Easy to overlook
Employer withholding uses $200,000 regardless of filing status Your employer must withhold the 0.9% Additional Medicare Tax once your wages from that employer exceed $200,000 in the calendar year. 1 This applies even if you are married filing jointly with a $250,000 threshold. If you earn $210,000, your employer withholds on the last $10,000 — but if your spouse earns $30,000, your combined income is $240,000 and below the $250,000 MFJ threshold. You recover the over-withheld amount on Form 8959. The opposite also happens: two spouses each earning $140,000 owe the tax on $30,000 combined, but neither employer withheld anything because neither exceeded $200,000 individually. General filing pattern — Additional Medicare Tax missed by dual-income couples
Self-employment income and wages are combined to determine liability If you have both W-2 wages and self-employment income, the two are added together to determine whether you exceed the threshold. 2 An employee earning $180,000 with a side business generating $40,000 in net self-employment income has combined earned income of $220,000 and owes Additional Medicare Tax on $20,000 (if filing single). The employer did not withhold anything because W-2 wages alone were under $200,000. IRS Form 8959 Instructions — Additional Medicare Tax
Watch out for this
Assuming your employer handled it. Employers only look at their own payroll. If you have multiple jobs or self-employment income, no single employer sees the full picture. You must calculate the Additional Medicare Tax on your combined earned income on Form 8959, reconcile with any withholding, and report the difference here. Failing to file Form 8959 when required results in a balance due and potential penalties.
Footnotes
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IRS Form 8959 Instructions, Employer Withholding. https://www.irs.gov/instructions/i8959 ↩
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IRS Form 8959 Instructions, Wages Subject to Additional Medicare Tax. https://www.irs.gov/instructions/i8959 ↩