Medicare payroll reconciliation
An employer begins withholding the 0.9% Additional Medicare Tax after it pays one employee more than $200,000 in Medicare wages during the year, regardless of filing status. The employee's final liability instead uses the filing-status threshold on Form 8959.
Examples use Medicare wages and omit RRTA compensation and self-employment income unless stated. Form 8959 combines relevant categories, and community-property or special employment rules may change the return calculation.
The employer trigger is always $200,000 per employee per employer. Return thresholds are $200,000 for single and head-of-household filers, $250,000 for married filing jointly, and $125,000 for married filing separately. The employer does not match the 0.9% Additional Medicare Tax.
Neither spouse's employer reaches the $200,000 payroll trigger, so no Additional Medicare Tax may be withheld. Combined Medicare wages are $280,000, which is $30,000 above the $250,000 joint threshold. The estimated Form 8959 liability is $270: $30,000 times 0.9%. Additional Form W-4 withholding or estimated payments may be useful.
If a married employee earns $210,000 while the spouse has no wages, the employer withholds $90 on the last $10,000. A joint-return threshold of $250,000 may produce no final liability, so Form 8959 reconciles the withholding.
Two employers each paying $150,000 do not individually cross the payroll trigger, but a single filer's combined $300,000 is $100,000 above the return threshold.
Do not stop regular 1.45% Medicare tax at $200,000, ask an employer to ignore its mandatory trigger, or apply the Social Security wage base to Medicare wages.
Official sources checked 2026-09-03: IRS Topic 560, IRS Form 8959, and IRS Additional Medicare Tax Q&A.