What income is subject to the Additional Medicare Tax?

Wages and salaries, self-employment income, and Railroad Retirement Tax Act (RRTA) compensation above the applicable threshold. Investment income (dividends, capital gains, interest) is NOT subject to the Additional Medicare Tax but may be subject to the separate 3.8% Net Investment Income Tax (NIIT) at similar income thresholds.

When does my employer start withholding the Additional Medicare Tax?

Your employer begins withholding the 0.9% Additional Medicare Tax once your wages from that employer exceed $200,000 in the calendar year — regardless of your filing status. The withholding begins at the next payroll period after your year-to-date wages cross $200,000.

What if I work two jobs and neither pays above $200,000?

Each employer withholds based only on wages paid by that employer. If you earn $150,000 at each of two jobs ($300,000 total) and file as single: you owe Additional Medicare Tax on $100,000 ($300,000 - $200,000). You calculate and pay this on Form 8959 at filing, since neither employer withheld it.

How do I avoid an underpayment of Additional Medicare Tax?

Add extra withholding through W-4 Step 4c if you know you will owe Additional Medicare Tax (two jobs each under $200K but combined over the threshold, or MFJ with combined income above $250K with each under $200K). You can also make quarterly estimated tax payments to cover the anticipated liability.

Does the Additional Medicare Tax reduce my Social Security benefits?

The 0.9% Additional Medicare Tax funds Medicare, not Social Security. It does not affect your future Social Security benefit calculation. Your Social Security benefit is based only on wages subject to the 6.2% Social Security tax (up to the $176,100 wage base). The additional 0.9% is Medicare-only.

The Additional Medicare Tax for High Earners: When 0.9% More Applies

Workers earning above $200,000 (single) or $250,000 (married) face an additional 0.9% Medicare tax on wages above those thresholds. Enacted as part of the Affordable Care Act, this additional tax can add hundreds to thousands of dollars per year to your paycheck deductions — with important withholding nuances for married couples.

The Additional Medicare Tax: Key Facts

Additional Medicare Tax key facts and thresholds

Factor	Detail
Tax rate	0.9% on wages above threshold
Single filer threshold	$200,000 in wages from one employer
Married filing jointly threshold	$250,000 total household wages
Married filing separately threshold	$125,000
Who withholds	Employer withholds once your wages exceed $200,000 from that employer
Adjustment at filing	Form 8959 reconciles actual liability based on filing status
Applies to	Wages, self-employment income, RRTA compensation

ℹ️Employers Withhold Based on $200,000 — Not Your Filing Status

Your employer starts withholding the 0.9% Additional Medicare Tax when your wages from that employer exceed $200,000 in a calendar year — regardless of your filing status. If you file jointly with a spouse earning $80,000 and you earn $180,000: combined $260,000 exceeds the $250,000 MFJ threshold, but your employer does NOT withhold the additional tax (you are under $200,000). You pay it at filing.

Scenarios That Create Under or Over-Withholding

Both spouses earn $150,000: each employer withholds no Additional Medicare Tax (neither exceeds $200K). But combined $300,000 > $250,000 MFJ threshold: $50,000 × 0.9% = $450 owed at filing.
One earns $250,000: employer withholds $50,000 × 0.9% = $450 (wages above $200K). Single filer threshold: $200K, so $450 is correct.
One earns $250,000, files MFJ with spouse earning $50K: combined $300K > $250K threshold. Tax on $50K excess: $450. Employer already withheld $450 (from $200K-$250K). Correct for MFJ.
One earns $300,000 (single): employer withholds $100,000 × 0.9% = $900. Correct.

Calculate Your Full FICA Tax Including Additional Medicare

Enter your annual salary to see standard and Additional Medicare Tax withholding at different income levels.

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Frequently Asked Questions

The Additional Medicare Tax for High Earners: When 0.9% More Applies

The Additional Medicare Tax: Key Facts

Scenarios That Create Under or Over-Withholding

Frequently Asked Questions

Frequently Asked Questions

More Take-Home Pay Guides

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How FICA Taxes Work: Social Security and Medicare on Your Paycheck