Tax Note for the week of June 10: The new 0.9% Medicare tax: Watch out for withholding issues Under the health care act, starting in 2013, taxpayers with earned income over $200,000 per year ($250,000 for joint filers and $125,000 for married filing separately) must pay an additional 0.9% Medicare tax on the excess earnings. Employers are required to withhold the tax beginning in the pay period in which wages exceed $200,000 for the calendar year — without regard to the employee’s filing status or income from other sources. So, it’s possible your employer: Will withhold the tax even though you aren’t liable for it. You can’t ask your employer to stop withholding the tax, but you can claim a credit on your income tax return. Won’t withheld the tax even though you are liable for it. You may use Form W-4 to request additional income tax withholding to cover your liability and avoid interest and penalties. If you have questions about how withholding issues related to the new 0.9% Medicare tax might affect you, please contact us.
Posted on: Thu, 13 Jun 2013 17:13:44 +0000
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