![]() All covered wages are subject to Medicare tax. There's no wage base limit for Medicare tax. Refer to "What's New" in Publication 15 for the current wage limit for social security wages or Publication 51 for agricultural employers. For earnings in 2023, this base is $160,200. The wage base limit is the maximum wage that's subject to the tax for that year. Only the social security tax has a wage base limit. For more information, see the Instructions for Form 8959 and Questions and Answers for the Additional Medicare Tax. There's no employer match for Additional Medicare Tax. ![]() An employer is required to begin withholding Additional Medicare Tax in the pay period in which it pays wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Employers are responsible for withholding the 0.9% Additional Medicare Tax on an individual's wages paid in excess of $200,000 in a calendar year, without regard to filing status. Revenue Procedure 2020-45 PDF provides details about these annual adjustments. Additional Medicare Tax Withholding RateĪdditional Medicare Tax applies to an individual's Medicare wages that exceed a threshold amount based on the taxpayer's filing status. IR-2020-245, OctoWASHINGTON The Internal Revenue Service today announced the tax year 2021 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Refer to Notice 2020-65 PDF and Notice 2021-11 PDF for information allowing employers to defer withholding and payment of the employee's share of Social Security taxes of certain employees. Refer to Publication 15, (Circular E), Employer's Tax Guide for more information or Publication 51, (Circular A), Agricultural Employer’s Tax Guide for agricultural employers. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total. The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. Social Security and Medicare Withholding Rates Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes, also known as social security taxes, and the hospital insurance tax, also known as Medicare taxes.
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