Medicare Tax will no longer be a flat rate
by TedMedicare Tax Computation on High Wage Earners
The new legislation includes a provision that, effective for tax years beginning after 2012, increases the Medicare tax rate by 0.9% for taxpayers receiving wages with respect to employment in excess of $200,000 ($250,000 for married couples filing jointly, and $125,000 for married couples filing separately). The tax is in addition to the regular Medicare tax rate of 1.45% on wages received by employees with respect to employment. Thus the Medicare tax rate will be 2.35% (1.45% + 0.9%) on wages in excess of $200,000. This change doesn’t affect the HI tax imposed on employers.
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