Most workers pay the same 1.45% Medicare tax on every paycheck. Once your earnings pass a certain level, though, an extra 0.9% kicks in. This guide explains how the Additional Medicare Tax works in 2026, who owes it, how to calculate it, and how to report it on your return.
1. What Is the Additional Medicare Tax?
Additional Medicare Tax is a 0.9% federal tax on Medicare-taxable wages, self-employment income, and Railroad Retirement Tax Act (RRTA) compensation above certain income thresholds. The thresholds depend on your tax filing status.
Unlike regular Medicare tax, employers don’t match this additional tax. Employees pay it on top of the standard 1.45% Medicare tax, bringing their total rate to 2.35% on wages subject to the additional tax.
Introduced in 2013 under the Affordable Care Act, the tax helps fund Medicare’s Hospital Insurance Trust Fund.
2. Who Pays Additional Medicare Tax in 2026?
When does Additional Medicare tax kick in? It applies once your Medicare wages, self-employment income, or RRTA compensation exceed the threshold for your filing status:
| Filing Status | 2026 Threshold |
| Married filing jointly | $250,000 |
| Married filing separately | $125,000 |
| Single | $200,000 |
| Head of household | $200,000 |
| Qualifying surviving spouse | $200,000 |
For married couples filing jointly, both spouses’ earnings count toward the $250,000 threshold.
These thresholds apply only to Medicare-taxable earnings. They don’t apply to every type of income in your adjusted gross income. Investment income, pensions, and Social Security benefits don’t count toward the 0.9% surtax.
3. How to Calculate Additional Medicare Tax
Here’s how to calculate Additional Medicare Tax in two simple steps.
Additional Medicare Tax Formula
0.9% surtax = (qualifying earnings above your threshold) × 0.9%
The 0.9% applies only to the portion of your earnings above the threshold, not your entire income. Earnings below the threshold are taxed only at the regular 1.45% Medicare rate.
Example of Additional Medicare Tax Calculation
| Item | Amount |
| Filing status | Single |
| Annual Medicare wages | $250,000 |
| Threshold | $200,000 |
| Earnings above threshold | $50,000 |
| Surtax owed ($50,000 × 0.9%) | $450 |
In this example, the extra tax is $450, not 0.9% of the full $250,000.
The math gets more complicated with multiple jobs, a working spouse, or a mix of wages and self-employment income. In those cases, add up all qualifying earnings before comparing them with your threshold.
4. How Does Additional Medicare Tax Withholding Work?
Employers must start withholding the extra 0.9% in the pay period when an employee’s Medicare wages from that employer pass $200,000 for the calendar year. The withholding continues for the rest of the year.
This $200,000 trigger applies regardless of filing status. Employers don’t know your spouse’s income or wages from other jobs, so they use one flat rule.
That explains a common question: “Why am I paying Additional Medicare Tax when it was never withheld?” Suppose two spouses each earn $150,000. Neither employer withholds anything, but their combined $300,000 exceeds the $250,000 joint threshold. They owe 0.9% on $50,000, or $450, when they file.
The opposite can also happen. If your employer withholds more than you actually owe, the extra is credited on your tax return.
>>> Read more: Are Medicare Premiums Tax Deductible in 2026? A Complete Guide to Part B, Medigap, and Extra Savings
5. Does Additional Medicare Tax Apply to Self-Employment Income?
Yes. Self-employed people can owe the Additional Medicare Tax on net self-employment income above their threshold.
The surtax is separate from the 2.9% Medicare portion of self-employment tax. It’s an extra 0.9% on top of that 2.9%.
If you have both wages and self-employment income, your Medicare wages reduce the threshold left for self-employment income, though not below zero. For example, a single filer with $130,000 in wages has only $70,000 of threshold left for self-employment income.
Because no employer withholds the surtax on self-employment income, you may need to cover it through quarterly estimated tax payments.
6. How to Report Additional Medicare Tax on Your Tax Return
Form 8959 is the IRS form used to calculate how much 0.9% surtax you owe and how much your employer already withheld.
You’ll need your Form W-2. Box 5 shows your Medicare wages and tips, and box 6 shows all Medicare tax withheld, including any surtax withholding. If you’re self-employed, you’ll also use the figures from Schedule SE.
Form 8959 compares what you owe with what was withheld. The surtax you owe goes on Schedule 2 of Form 1040, and any surtax withholding is added to your federal tax withholding. Attach Form 8959 to your Form 1040, 1040-SR, 1040-NR, or 1040-SS.
If you expect to owe more than your withholding covers, consider estimated tax payments or extra withholding to avoid penalties.
7. Additional Medicare Tax vs. Regular Medicare Tax
The Additional Medicare Tax adds to the regular Medicare tax rather than replacing it.
| Feature | Regular Medicare Tax | 0.9% Surtax |
| Employee rate | 1.45% | 0.9% |
| Employer match | Yes, 1.45% | No |
| Applies to | All Medicare wages | Earnings above the threshold |
| Income threshold | None | 125,000–250,000 by filing status |
| Reported on | Form W-2 / Schedule SE | Form 8959 |
Together, the two rates generally bring an employee’s Medicare tax rate to 2.35% on wages above the threshold.
8. Can You Avoid or Get a Refund of Additional Medicare Tax?
If your earnings exceed the threshold, you can’t opt out of the surtax. Your employer also can’t stop withholding it once your wages pass $200,000, even if you ask.
If your employer withheld more than you actually owe, Form 8959 reconciles the difference. The excess is credited toward your total federal tax for the year and may increase your refund.
To avoid a surprise bill, you can raise your income tax withholding on Form W-4 or make estimated tax payments during the year.
>>> Read more: What Is Medicare Tax? 2026 Rates & Paycheck Examples
9. FAQs
Does Additional Medicare Tax apply to retirement income or Social Security benefits?
No. The 0.9% surtax applies only to Medicare wages, self-employment income, and RRTA compensation. Pensions, IRA withdrawals, and Social Security benefits aren’t subject to it. High earners may owe the separate 3.8% Net Investment Income Tax on investment income.
Is the Additional Medicare Tax deductible for the self-employed?
No. Self-employed people can deduct half of their regular self-employment tax, but none of the 0.9% surtax is deductible.
Does the threshold change every year?
No. The $200,000, $250,000, and $125,000 thresholds are set by law and aren’t adjusted for inflation.
What is the most overlooked tax deduction?
It depends on your situation. For self-employed people, commonly missed deductions include half of self-employment tax, the self-employed health insurance deduction, and retirement plan contributions.
10. Final Thoughts
The Additional Medicare Tax adds 0.9% only to earnings above your filing-status threshold, and employers don’t match it. Check your W-2, use Form 8959 to reconcile withholding, and adjust your withholding or estimated payments if you’re married, self-employed, or work more than one job.
