What is the Additional Medicare Tax?

A 0.9 percent surcharge on Medicare wages above $200,000 single or $250,000 married filing jointly. Created by the Affordable Care Act. Employee-only, no employer match.

Does my employer withhold it automatically?

Only on wages above $200,000 in a calendar year with that employer. With multiple jobs, the threshold may not trigger automatically and you reconcile at filing time using Form 8959.

Are the thresholds indexed for inflation?

No. They have been the same since 2013.

Is this the same as the Net Investment Income Tax?

No. NIIT is a separate 3.8 percent tax on investment income for high earners. Different tax, different form (Form 8960).

Additional Medicare Tax (0.9 Percent)

An extra 0.9 percent Medicare surcharge on high earners. Created by the Affordable Care Act. Different rules than base Medicare and worth understanding if you cross the threshold.

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The thresholds

$200,000 for single, head of household
$250,000 for married filing jointly
$125,000 for married filing separately

These thresholds are NOT indexed to inflation. They have been the same since 2013.

Employer withholding rule

Employers must withhold the 0.9 percent on wages above $200,000 in a calendar year per employer, regardless of your filing status. So a married filer earning $300,000 from one employer has the surcharge withheld on $100,000 even though their MFJ threshold is $250,000.

Multi-job complication

Each employer withholds based on wages with that employer alone. If you and your spouse each earn $150,000 (combined $300,000 MFJ), neither employer triggers the withholding (each is below $200k), but you owe the surcharge on $50,000 at filing time.

Or: you earn $250k from one employer who withheld on $50k of wages. Your spouse earns $50k. Combined $300k MFJ exceeds $250k by $50k. Withholding matched the actual liability. Form 8959 reconciles the math.

Self-employment

1099 contractors pay 0.9 percent self-employment Medicare above the same thresholds.

Investment income surcharge

The Net Investment Income Tax (NIIT) is a separate 3.8 percent tax on investment income for high earners (same income thresholds). Different tax, different form (Form 8960). Often confused with Additional Medicare.

Frequently asked questions

What is the Additional Medicare Tax?: A 0.9 percent surcharge on Medicare wages above $200,000 single or $250,000 married filing jointly. Created by the Affordable Care Act. Employee-only, no employer match.
Does my employer withhold it automatically?: Only on wages above $200,000 in a calendar year with that employer. With multiple jobs, the threshold may not trigger automatically and you reconcile at filing time using Form 8959.
Are the thresholds indexed for inflation?: No. They have been the same since 2013.
Is this the same as the Net Investment Income Tax?: No. NIIT is a separate 3.8 percent tax on investment income for high earners. Different tax, different form (Form 8960).