Medicare Tax to Increase in 2013
Effective in 2013, employers are required to withhold an additional Medicare tax of 0.9% on wages in excess of $200,000 for all employees regardless of marital status
► There is no matching employer contribution, and employees are required to pay the additional tax based on a threshold of income and their filing status
► Tax payers with combined in come in excess of $250,000 pay the remaining Medicare tax on their Federal Form 1040
► The additional Medicare tax is not separately reported on Form W-2
► Form 941 will include separate line for additional Medicare tax
► Also effective in 2013, investment income is subject to Medicare tax
► A number of employees may need to revise their Form W-4 in 2013 to take into account this additional tax
► There is no matching employer contribution, and employees are required to pay the additional tax based on a threshold of income and their filing status
► Tax payers with combined in come in excess of $250,000 pay the remaining Medicare tax on their Federal Form 1040
► The additional Medicare tax is not separately reported on Form W-2
► Form 941 will include separate line for additional Medicare tax
► Also effective in 2013, investment income is subject to Medicare tax
► A number of employees may need to revise their Form W-4 in 2013 to take into account this additional tax