Additional Medicare Tax is a tax that is imposed on certain high-income individuals in the U.S. to help fund the Medicare program. It was introduced as part of the Affordable Care Act.
Employers are responsible for withholding Additional Medicare Tax from an employee's wages once employee's wages reach certain threshold. The withheld tax amount is reported on Form W-2.
The Additional Medicare Tax applies to individuals whose wages, self-employment income, or railroad retirement compensation exceed specific income thresholds.
The thresholds are $200,000 for individuals filing as single or head of household, $250,000 for married couples filing jointly, and $125,000 for married individuals filing separately.
Additional Medicare Tax rate is 0.9%. It is applied in addition to regular Medicare tax rate of 1.45%. Individuals subject to the Additional Medicare Tax pay a total Medicare tax rate of 2.35%.
If you had multiple employers or your combined wages exceeded the threshold, you might have overpaid the Additional Medicare Tax. In such cases, you can claim a refund for the excess tax.