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IRS Issues Rules on Additional Medicare Tax

IRS Issues Rules on Additional Medicare Tax

After receiving limited input during the required comment period, the Internal Revenue Services has issued the final regulations relating to Additional Hospital Insurance Tax on income above threshold amounts (“Additional Medicare Tax”), as added by the Affordable Care Act. 

Essentially unchanged from the regulation proposed last year, the final regulations provide guidance for employers and individuals relating to the implementation of Additional Medicare Tax, including the requirement to withhold Additional Medicare Tax on certain wages and compensation, the requirement to file a return reporting Additional Medicare Tax, the employer process for adjusting underpayments and overpayments of Additional Medicare Tax, and the employer and individual processes for filing a claim for refund for an overpayment of Additional Medicare Tax. 

The regulation will become effective on the date it is published in the Federal Register, though the tax itself took effect on January 1 of 2013.  It applies to wages, compensation, and self-employment income received after that date if the income is more than $200,000 for single taxpayers and $250,000 for married filing jointly (or $125,000 for married filing separately) taxpayers.

 

 

Source:  Internal Revenue Service at http://www.regulations.gov/#!documentDetail;D=IRS-2012-0048-0010

 

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