The Affordable Care Act (ACA) increases the Medicare hospital insurance tax rate for high-income individuals beginning in 2013. The Internal Revenue Service has issued questions and answers (Click Here) regarding the Additional Medicare Tax. The Additional Medicare Tax applies to individuals’ wages, other compensation and self-employment income over certain thresholds. Employers are responsible for withholding the tax on wages and other compensation in certain circumstances.
To accommodate these new withholding obligations, the IRS intends to revise Forms 941, 943 and other Tax Return Forms that employers and payroll service providers will need to file.
All employers should prepare for these new withholding responsibilities and ensure that Accounting and Payroll Departments have the necessary policies and procedures in place to comply within the new rules. Employers should also contact their payroll service providers, if any, as necessary to ensure they are in a position to adequately handle this new task.
|
FILING STATUS |
THRESHOLD AMOUNT |
| Married filing jointly |
$250,000 |
| Married filing separately |
$125,000 |
| Single |
$200,000 |
| Head of household (with qualifying person) |
$200,000 |
| Qualifying widow(er) with dependent child |
$200,000 |