Updated 30 March 2026
Additional Medicare Tax (0.9%)
Since 2013, high earners have paid an extra 0.9% Medicare surtax on earned income above their filing status threshold. Here is how it works, who pays it, and how to report it on Form 8959.
0.9%
Surtax Rate
$200K
Single Threshold
$250K
MFJ Threshold
$125K
MFS Threshold
Who Pays the Additional Medicare Tax?
Income That Counts
- Wages, salaries, and tips (W-2 income)
- Self-employment income (Schedule SE)
- Railroad retirement compensation (RRTA)
- Combined income from multiple jobs in the same year
- Income earned by both spouses on a joint return (combined)
Income That Does Not Count
- Investment income (dividends, capital gains) - covered by NIIT instead
- Rental income - covered by NIIT if applicable
- Social Security benefits
- Tax-exempt interest
- Distributions from retirement accounts (401k, IRA)
Employer Withholding vs. Actual Liability
There is a critical mismatch between how employers withhold the Additional Medicare Tax and how your actual liability is calculated. Employers must begin withholding the extra 0.9% when your wages from that single job exceed $200,000, regardless of your filing status. But your actual tax liability depends on your filing status and your total household income.
This means you might be over-withheld or under-withheld. For example, if you are married filing jointly earning $180,000 and your spouse earns $120,000, neither employer withholds the additional tax (neither exceeds $200K). But your combined $300,000 exceeds the $250,000 MFJ threshold, so you owe 0.9% on $50,000 = $450 when you file your return.
Always reconcile on Form 8959 when filing. You may owe additional tax or receive a credit for overwithholding.
Withholding Examples
How the $200,000 employer withholding rule plays out in practice.
| Scenario | Withheld by Employer | Why |
|---|---|---|
| Single, $180,000 salary | $0 | Wages under $200,000 threshold |
| Single, $250,000 salary | $450 | 0.9% x ($250K - $200K) = $450 |
| MFJ, $150K each spouse (two W-2s) | $0 | Neither spouse exceeds $200K; but $300K combined may owe on return |
| MFJ, $280,000 one earner | $720 | 0.9% x ($280K - $200K) = $720; but threshold is $250K MFJ, so true liability is $270 |
| Single, $500,000 salary | $2,700 | 0.9% x ($500K - $200K) = $2,700 |
| MFS, $200,000 salary | $0 | Under $200K employer threshold; but true threshold is $125K MFS, owes $675 on return |
How to File: Form 8959
If you owe Additional Medicare Tax or had it withheld, you must file Form 8959 with your tax return. The form has three parts:
Part I: Additional Medicare Tax on Wages
Enter your total Medicare wages (from all W-2s, Box 5), subtract the threshold for your filing status, and multiply the excess by 0.9%. If you have wages from multiple employers, combine them here.
Part II: Additional Medicare Tax on Self-Employment Income
Enter your self-employment income from Schedule SE. The threshold is reduced by your W-2 wages (but not below zero). This prevents double-counting of the threshold across wage and SE income.
Part III: Additional Medicare Tax on RRTA Compensation
For railroad employees only. Enter your RRTA compensation and calculate the additional tax. Most taxpayers skip this section.
Part IV: Withholding Reconciliation
Compare what your employer(s) withheld (from W-2, Box 6) against your total liability. If you were over-withheld, you get a credit. If under-withheld, you owe the difference. Transfer the result to your Form 1040.
History of the Additional Medicare Tax
Affordable Care Act signed into law, including Section 9015 establishing the Additional Medicare Tax
Additional Medicare Tax takes effect for tax year 2013 (0.9% on earned income over threshold)
Net Investment Income Tax (3.8%) also takes effect under Section 1411
Thresholds remain unchanged at $200K/$250K/$125K; not indexed for inflation
IRS estimates over 6 million taxpayers subject to Additional Medicare Tax due to wage growth and static thresholds
Planning Tip
Because the $200,000/$250,000 thresholds are not indexed for inflation, more taxpayers become subject to the Additional Medicare Tax each year as wages rise. If your household income is approaching the threshold, consider increasing estimated tax payments or adjusting your W-4 to withhold extra federal tax to avoid an underpayment penalty at filing time.