Health Care Reform Series

Health Care Reform – Additional Medicare Tax on High Income Earners

By Jill F. Rosenfeld, Esq.

Health Care Reform is here. The recently enacted law is comprised of two acts, The Patient Protection and Affordable Care Act signed into law on March 23, 2010 and the Health Care and Education Reconciliation Act enacted on March 30, 2010. Together, these two acts are commonly referred to as “Health Care Reform” and cover a broad spectrum of health care issues, which is quite lengthy and complicated. This blog will be a part of a series of blogs discussing various aspects of Health Care Reform and which may be of particular interest to our clients, family, friends and the general public. If you would like us to cover other aspects of Health Care Reform, please let us know.

Part 1 – Additional Hospital Insurance Tax


Beginning in January 2013, the Medicare Hospital Insurance Tax will be increased for high income earners. Currently employers and employees are each subject to a tax of 1.45% of wages paid to the employee. The employee’s portion is withheld from wages and paid with the employer’s match by the employer to the IRS. An additional 0.9% tax will be assessed on the amount earned in excess of the following thresholds:

Married Filing Jointly                            $250,000

Single Filers                                          $200,000

Married Filing Separately                      $125,000

The additional tax also applies to self-employment income.

The employee is liable to pay this tax with his/her 1040, if it is not withheld by the employer. The additional tax should be taken into account when determining whether or not an employee should pay estimated taxes.

If you would like further information on this additional tax, please let us know.  At a minimum, you should contact your tax professional to prepare for the new obligation.

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