The Additional Medicare Tax kicks in once your earned income for the year passes $200,000 if you file as single or head of household, or $250,000 if you’re married filing jointly. The 0.9% surtax applies only to the dollars above that line, not to your full income. It has been in effect since January 1, 2013, and the threshold amounts are written into the tax code with no inflation adjustment, so more earners cross them each year as wages rise.
The Thresholds That Trigger the Tax
The 0.9% is layered on top of the standard 1.45% Medicare tax every employee already pays, bringing your combined Medicare rate to 2.35% on earnings above the threshold.1Office of the Law Revision Counsel. 26 U.S. Code 3101 – Rate of Tax Where that threshold sits depends on how you file:
- Married filing jointly: $250,000
- Married filing separately: $125,000
- Single: $200,000
- Head of household: $200,000
- Qualifying surviving spouse: $200,000
The math is simple. A single filer with $230,000 in wages owes the extra 0.9% only on the $30,000 above $200,000, which comes to $270. The first $200,000 is unaffected.2Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
What Income Counts Toward the Threshold
The surtax applies to wages, salary, tips, and other compensation subject to FICA withholding, plus net self-employment earnings. If you have both, they’re combined when measured against your threshold. Non-cash fringe benefits and deferred compensation that appear in your FICA wages count too. Railroad Retirement Tax Act compensation is treated the same way under the same thresholds.3eCFR. 26 CFR 31.3102-4 – Special Rules Regarding Additional Medicare Tax
Investment income does not count. Dividends, interest, capital gains, and rental income are handled by a separate surtax (the Net Investment Income Tax) and never flow into the Additional Medicare Tax calculation.
When Your Employer Starts Withholding
Your employer begins withholding the extra 0.9% from your paycheck the moment your year-to-date wages from that employer reach $200,000. The rule is mechanical: your employer ignores your filing status, your spouse’s earnings, and any wages you make at another job. It watches only its own running total.3eCFR. 26 CFR 31.3102-4 – Special Rules Regarding Additional Medicare Tax
That $200,000 trigger is identical for everyone, even though your actual threshold might be $125,000 or $250,000. A mid-year bonus that pushes year-to-date wages past $200,000 starts the withholding that pay period, including on the portion of the bonus above the line. There is no special supplemental-wage rate.
When Withholding Covers More Than You Owe
If you’re married filing jointly and earn $210,000 from one employer, your employer withholds the surtax on the $10,000 above $200,000. But your joint threshold is $250,000, so you don’t actually owe it. The $90 comes back as a credit when you file.2Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
When Withholding Falls Short
This is the trap. Two jobs paying $150,000 each never hit the $200,000 employer trigger, so neither withholds a cent. Your combined $300,000 blows past the $200,000 single threshold by $100,000, leaving a $900 surtax that nobody collected. Married couples filing separately run into the same problem when two modest paychecks combine to clear the $125,000 threshold.
Form W-4 is the fix. Line 4(c) lets you ask for an additional flat dollar amount withheld from each paycheck. That extra withholding is technically income tax, but it covers the Additional Medicare Tax gap so nothing surprises you in April.
When Self-Employment Earnings Trigger the Tax
If you’re self-employed, there’s no employer running a tally, and the full calculation is on you. The surtax applies to your net self-employment earnings from Schedule SE.
Wages come first when both are in the picture. Your threshold is reduced by your wages, and whatever remains is applied to self-employment income. A single filer with $180,000 in W-2 wages and $50,000 in net self-employment income has $20,000 of threshold left after wages. The surtax hits $30,000 of the self-employment income, which produces $270 in tax. If your wages alone already exceed the threshold, every dollar of self-employment profit is subject to the 0.9% from the start.
Paying It Through Estimated Taxes
Self-employed filers account for the Additional Medicare Tax in their quarterly estimated payments. For the 2026 tax year:
- 1st payment: April 15, 2026
- 2nd payment: June 15, 2026
- 3rd payment: September 15, 2026
- 4th payment: January 15, 2027
You can skip the January 15, 2027 payment by filing your 2026 return and paying the full balance by February 1, 2027.4Internal Revenue Service. 2026 Form 1040-ES – Estimated Tax for Individuals If your income fluctuates, the annualized income installment method on Schedule AI of Form 2210 bases each quarter’s payment on income you actually earned that period.
Reconciling at Tax Time on Form 8959
Everything settles up on Form 8959. You have to file it if Medicare wages on any single W-2 exceed $200,000, or if your combined wages and self-employment income exceed the threshold for your filing status.5Internal Revenue Service. Instructions for Form 8959, Additional Medicare Tax
The form calculates the surtax on your wages, calculates it on your self-employment income using whatever threshold remains after wages, and then isolates how much Additional Medicare Tax your employer already withheld. Because your W-2 Box 6 combines regular Medicare tax and the surtax into one number, the form backs out 1.45% of Medicare wages (Box 5) to find the Additional Medicare Tax portion.6Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3 The tax flows to Schedule 2 of your Form 1040 (Line 11); the withholding credit flows to the payments section. The gap between them is what you owe or get back.
Avoiding an Underpayment Penalty
If you end up owing Additional Medicare Tax that wasn’t withheld or paid in through estimates, the IRS can add an underpayment penalty plus interest. The underpayment interest rate was 7% per year (compounded daily) for Q1 2026 and 6% for Q2 2026; the IRS resets it quarterly.7Internal Revenue Service. Quarterly Interest Rates
You avoid the penalty by meeting any of these safe harbors:
- Your total tax minus withholding is under $1,000.
- You paid at least 90% of the current year’s tax through withholding and estimates.
- You paid at least 100% of last year’s total tax (110% if your prior-year adjusted gross income was above $150,000, or $75,000 if married filing separately).
For most people crossing the Additional Medicare Tax threshold, the 110% prior-year safe harbor is the cleanest shield. Paying 110% of last year’s total tax through withholding and estimates protects you from a penalty even if your income jumps substantially this year.8Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty The IRS can also waive the penalty if the shortfall came from a casualty or disaster, or if you retired after reaching age 62 or became disabled during the year.9Internal Revenue Service. Instructions for Form 2210