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Final regs clarify the 0.9% additional Medicare tax

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in Office Management,Payroll Management

You’ve been withholding and reporting the 0.9% additional Medicare tax for a year now. Good news: With the exception of clarifying the procedure you use to request relief from paying any additional tax if employees paid the tax with their 1040 forms, final regulations make no changes to the proposed regs. The regs apply to calendar quarters beginning on or after Nov. 29, 2013. (78 F.R. 71468, 11-29-13)

Additional Medicare tax review. The additional tax kicks in when employees, regardless of their marital status, earn more than $200,000. Married couples filing jointly are liable for the tax if their combined wages exceed $250,000. So, if a married couple works for the same employer and each earns $150,000, you don’t withhold the additional tax, since neither employee’s wages exceed $200,000, even though you know that their combined income exceeds $250,000.

The additional tax is treated like income taxes. Joint filers and empl...(register to read more)

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