Additional Medicare Tax, IRS Form 8959 (2023)

The Additional Medicare Tax, sometimes called the "Medicare surtax," is a 0.9% tax applied to a portion of your income above a certain threshold. This tax helps fund the Medicare Hospital Insurance (HI) Trust Fund. While your employer typically withholds regular Medicare tax, the Additional Medicare Tax applies only to higher earners.

Who Needs to File Form 8959?

You might need to file Form 8959 if:

  • Your Medicare wages and tips on any single W-2 exceed $200,000 (Single, Head of Household, Qualifying Widow(er)).
  • Your RRTA compensation on any single W-2 exceeds $200,000.
  • The combined total of your Medicare wages, tips, and self-employment income (including your spouse's if filing jointly) surpasses the threshold amount for your filing status. (See chart in the official instructions for Form 8959)

Key Points about Form 8959:

  • Purpose: Calculate your Additional Medicare Tax liability and reconcile it with any withholding by your employer.
  • Where to get it: Download from the IRS website or order by phone.
  • Filing deadline: Same as your main tax return (typically April 15th, with extensions possible).
  • Penalties: Failure to file or pay on time may result in penalties and interest.

How to file Form 8959?

  • Gather your W-2s and other income statements.
  • Follow the instructions carefully, completing each section as applicable.
  • Use the provided worksheet to calculate your tax liability.
  • Compare the calculated tax with any Additional Medicare Tax withheld by your employer.
  • Claim a credit for any excess withholding on your main tax return.

Additional Notes:

  • Self-employment income: For self-employed individuals, the threshold for the Additional Medicare Tax is reduced by the amount of Medicare wages received.
  • Married couples: If filing jointly, the threshold amount is based on combined income.
  • Multiple W-2s: If you have multiple jobs, aggregate your Medicare wages and tips from all W-2s to determine if you exceed the threshold.

For the current year's Form 8959, click here.