2017 Additional Medicare Tax Threshold
For 2017, the Additional Medicare Tax Threshold figures are 0.9% (Rate), $250,000 (Married filing jointly), $125,000 (Married filing separately) and $200,000 (All other taxpayers).
Effective 2017-01-01Source: 2017 Instructions for Form 8959 (IRS)Verified 2026-09-03
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Rate | 0.9% | 0.9% | +0% (+0.0%) |
| Married filing jointly | $250,000 | $250,000 | +$0 (+0.0%) |
| Married filing separately | $125,000 | $125,000 | +$0 (+0.0%) |
| All other taxpayers | $200,000 | $200,000 | +$0 (+0.0%) |
Who it applies to
Taxpayers who owe Additional Medicare Tax on their Medicare wages, railroad retirement compensation, or self-employment income and file as married filing jointly or married filing separately for 2017
What changed this year, and why
For 2017, the Additional Medicare Tax rate is 0.9%. The tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that exceed a threshold based on filing status. The threshold for married filing jointly is $250,000. The threshold for married filing separately is $125,000. These threshold amounts are not indexed for inflation.
Common questions
- What is the Additional Medicare Tax rate for 2017?
- The rate is 0.9%.
- What is the threshold for married filing jointly?
- The threshold is $250,000.
- What is the threshold for married filing separately?
- The threshold is $125,000.
- Are the threshold amounts adjusted for inflation?
- No. The threshold amounts for Additional Medicare Tax are not indexed for inflation.
Your employer withholds at $200,000 whatever your filing status
An employer must begin withholding the 0.9% Additional Medicare Tax in the pay period when an employee's wages or railroad retirement compensation for the year exceed $200,000, and must continue withholding it every pay period for the rest of that calendar year. This $200,000 withholding threshold applies to all employees regardless of whether they file as single, married filing jointly, married filing separately, head of household, or qualifying widow(er). Because the actual Additional Medicare Tax thresholds vary by filing status - for example, $250,000 for married filing jointly or $125,000 for married filing separately - some taxpayers will have more tax withheld than they ultimately owe, while others may have too little withheld and will owe additional tax when they file their return. A taxpayer cannot ask an employer to stop withholding once the $200,000 trigger is reached. Any over-withheld Additional Medicare Tax can be claimed as a credit against total tax liability on the return by filing Form 8959.
Your employer is required to begin withholding Additional Medicare Tax in the pay period in which your wages or compensation for the year exceed $200,000 and continue to withhold it in each pay period for the remainder of the calendar year.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
These thresholds do not move with inflation
The thresholds that determine whether you owe the 0.9% Additional Medicare Tax are fixed dollar amounts that do not change with inflation. The threshold is $250,000 for married filing jointly and $125,000 for married filing separately. These amounts remain the same each year unless Congress amends the law. Because they are not indexed for inflation, taxpayers whose income rises only at the rate of inflation may gradually find themselves subject to the tax even though their real purchasing power has not increased. For example, a single filer earning wages exactly at the threshold amount today may exceed it in future years as inflation pushes nominal wages higher while the threshold stays fixed. This differs from many other tax provisions, such as standard deduction amounts and tax bracket boundaries, which are adjusted annually for cost-of-living increases. Taxpayers should not assume these thresholds will rise each year when planning whether they might owe Additional Medicare Tax on wages, self-employment income, or railroad retirement compensation.
Note. The threshold amounts below aren't indexed for inflation.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
When Form 8959 is required
A taxpayer must file Form 8959, Additional Medicare Tax, if any of several conditions apply. The form is required when Medicare wages and tips reported on any single Form W-2 in box 5 exceed $200,000, or when railroad retirement compensation reported in box 14 of any single Form W-2 exceeds $200,000. It is also required when total Medicare wages and tips combined with self-employment income exceed the threshold for the taxpayer's filing status - for example, $250,000 for married filing jointly or $125,000 for married filing separately. Similarly, Form 8959 must be filed when total railroad retirement compensation and tips exceed the filing-status threshold. Medicare wages include wages and tips from Form W-2 box 5, tips reported on Form 4137 line 6, and wages from Form 8919 line 6. Self-employment income is taken from Schedule SE, Section A line 4 or Section B line 6, but negative amounts are ignored. If any of these amounts are later adjusted, the taxpayer may need to correct their Additional Medicare Tax liability by filing a corrected Form 8959 with an amended return.
Who Must File You must file Form 8959 if one or more of the following applies to you. Your Medicare wages and tips on any single Form W-2 (box 5) are greater than $200,000. Your railroad retirement (RRTA) compensation on any single Form W-2 (box 14) is greater than $200,000. Your total Medicare wages and tips plus your self-employment income (including the Medicare wages and tips and self-employment income of your spouse, if married filing jointly) are greater than the threshold amount for your filing status in the chart on this page.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Wages and self-employment income are added together
Medicare wages and self-employment income are added together when determining whether a taxpayer's income exceeds the Additional Medicare Tax threshold for their filing status. For example, if a taxpayer has both wages from employment and income from self-employment, those two amounts are combined and compared to the threshold - $250,000 for married filing jointly, $125,000 for married filing separately, or the applicable amount for other filing statuses. If the combined total exceeds the threshold, the 0.9% Additional Medicare Tax applies to the excess. However, a self-employment loss is not counted and does not reduce the Medicare wages for this purpose. The threshold for applying the tax to self-employment income is reduced by the amount of Medicare wages already subject to Additional Medicare Tax, so that wages and self-employment income are not taxed twice. Railroad retirement compensation is handled separately and is not combined with wages or self-employment income.
Medicare wages and self-employment income are combined to determine if your income exceeds the threshold.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Railroad compensation is measured on its own
Railroad retirement compensation is treated separately from Medicare wages and self-employment income for purposes of the Additional Medicare Tax. While Medicare wages and self-employment income are combined and tested together against the threshold, railroad retirement compensation is measured on its own and compared separately to the threshold for the taxpayer's filing status. This means that a railroad worker's RRTA compensation is not added to their Medicare wages or self-employment income when determining whether the threshold is exceeded. For example, if the threshold for a taxpayer's filing status is $250,000 for married filing jointly, the RRTA compensation is tested independently against that $250,000 amount, and any Medicare wages plus self-employment income are also tested independently against the same $250,000 amount. If neither category alone exceeds the threshold, no 0.9% Additional Medicare Tax is owed, even if the combined total of all three categories would exceed it. This separate treatment ensures that railroad retirement compensation is not penalized by being combined with other income.
Railroad retirement (RRTA) compensation should be separately compared to the threshold.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Nonresident aliens and Americans abroad get no special exemption
Nonresident aliens and U.S. citizens living abroad are subject to the same rules as everyone else. There is no separate exemption, higher threshold, or special filing procedure for anyone who lives outside the United States or who is not a U.S. resident for tax purposes. Any wages, railroad retirement (RRTA) compensation, or self-employment income that is subject to regular Medicare tax is also subject to the 0.9% Additional Medicare Tax once it exceeds the threshold that applies to the taxpayer's filing status.
There are no special rules for Additional Medicare Tax for nonresident aliens and U.S. citizens living abroad. Wages, railroad retirement (RRTA) compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withholding starts the pay period your wages cross $200,000, not spread over the year
For federal Additional Medicare Tax purposes, an employer must start withholding the 0.9% tax the moment your cumulative wages or railroad retirement compensation for the calendar year cross $200,000. Withholding does not begin earlier, even if your annual pay will clearly exceed that amount, and it is not spread evenly over the year based on an estimate. Once your pay for the year passes $200,000, the employer begins deducting the tax in that same pay period and continues to withhold it in every pay period for the rest of the calendar year, regardless of your filing status or the thresholds that apply when you file your return. Married couples filing jointly face a $250,000 threshold and those filing separately face a $125,000 threshold when they calculate the total tax they owe on Form 8959, but the employer's withholding trigger stays at $200,000 per worker. As a result, a married employee whose spouse also earns wages may see more withheld at work than the household ultimately owes, or may owe additional tax at filing if combined income exceeds the lower joint or separate threshold.
Your employer is responsible for withholding the 0.9% Additional Medicare Tax on your Medicare wages or railroad retirement (RRTA) compensation paid in excess of $200,000 in a calendar year. Your employer is required to begin withholding Additional Medicare Tax in the pay period in which your wages or compensation for the year exceed $200,000 and continue to withhold it in each pay period for the remainder of the calendar year.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withheld Additional Medicare Tax comes back as a credit if you do not actually owe it
If your employer withheld Additional Medicare Tax during the year but you determine on Form 8959 that you do not actually owe the tax, the amount that was withheld is not lost. You can claim it as a credit against the total tax liability shown on your return by filing Form 8959. The credit works the same way as a credit for regular income tax withholding: it reduces the balance you owe or increases the refund you receive. This situation can arise when an employer withheld the 0.9% tax because your wages from that employer exceeded the withholding threshold, but your combined income for the year is below the liability threshold for your filing status.
If you don't owe Additional Medicare Tax, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Your wages eat into the threshold for your self-employment income, but RRTA pay does not
When you have both wages and self-employment income, the wages count against the threshold that applies to your self-employment income. The threshold for Additional Medicare Tax on self-employment income is reduced, but not below zero, by the total amount of Medicare wages you received that are subject to Additional Medicare Tax. There is no equivalent reduction for railroad retirement (RRTA) compensation: RRTA compensation does not reduce the threshold for self-employment income. This means two taxpayers with the same self-employment income can owe different amounts of Additional Medicare Tax depending on how much wage income they also have.
If you have both wages and self-employment income, the threshold amount for applying Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. There is no equivalent rule for railroad retirement (RRTA) compensation.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
Waiting to pay it with your return can trigger a penalty
The 0.9% Additional Medicare Tax is not covered by special withholding rules that would shield you from the underpayment of estimated tax penalty. If the tax is not withheld by your employer, you are responsible for paying it, and if you wait until you file your return instead of making estimated tax payments during the year, you may be subject to a penalty. You cannot designate estimated tax payments specifically for Additional Medicare Tax; any estimated payments you make apply to your overall tax liability. To avoid the penalty, you need to make sure your total withholding and estimated tax payments are sufficient to cover your total tax, including any Additional Medicare Tax.
To the extent Additional Medicare Tax isn't withheld by your employer, you must pay the tax. If you anticipate that you will owe Additional Medicare Tax for 2018 but won't satisfy the liability through withholding, you may need to make estimated tax payments.
2017 Instructions for Form 8959, Additional Medicare Tax (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2017 Instructions for Form 8959 (IRS)
- Rate
Additional Medicare Tax. A 0.9% Additional Medicare Tax applies to your Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount.
- Married filing jointly
Married filing jointly $250,000
- Married filing separately
Married filing separately $125,000
- All other taxpayers
Single $200,000 Head of household $200,000 Qualifying widow(er) $200,000