2018 Additional Medicare Tax Threshold
For 2018, 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 2018-01-01Source: 2018 Instructions for Form 8959 (IRS)Verified 2026-09-03
Compared with 2017
Every figure on this page is unchanged from 2017.
| Item | 2017 | 2018 | 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 wages or self-employment income in 2018 and must file Form 8959.
What changed this year, and why
For 2018, the Additional Medicare Tax rate is 0.9%. The tax applies to Medicare wages and self-employment income above a threshold based on filing status. For married filing jointly, the threshold is $250,000. For married filing separately, the threshold is $125,000. Medicare wages and self-employment income are combined to determine whether income exceeds the threshold. A self-employment loss is not considered.
Common questions
- Who must pay the Additional Medicare Tax and how is it calculated?
- The tax applies to Medicare wages and self-employment income combined above the threshold for your filing status. For 2018, married filing jointly taxpayers have a threshold of $250,000, and married filing separately taxpayers have a threshold of $125,000. A self-employment loss is not considered for this tax. You report the tax on Form 8959.
Your employer withholds at $200,000 whatever your filing status
Employers must withhold the 0.9% Additional Medicare Tax from Medicare wages or railroad retirement (RRTA) compensation once those payments exceed $200,000 in a calendar year, no matter what your filing status is. Withholding starts in the pay period when your wages or compensation for the year cross the $200,000 mark and continues every pay period for the rest of the calendar year. You cannot ask your employer to stop the withholding if it is required. If your actual liability turns out to be less than what was withheld because your filing-status threshold is higher than $200,000, you can claim a credit for the excess against your total tax liability by filing Form 8959. Conversely, if your threshold is lower than $200,000, you may still owe additional tax that was not withheld.
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.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
These thresholds do not move with inflation
The income thresholds that determine whether you owe the 0.9% Additional Medicare Tax are fixed by statute and do not increase with inflation. The chart lists $250,000 for married filing jointly, $125,000 for married filing separately, and other fixed amounts for single, head of household, and qualifying widow(er). These dollar figures remain the same each year unless Congress changes the law. As a result, over time more taxpayers may find their income above the threshold simply because wages rise with inflation, even though their real purchasing power has not changed. When planning, do not assume the thresholds will move upward to match cost-of-living adjustments. The same unindexed figures apply to decide both whether you must file Form 8959 and how much of your Medicare wages, railroad retirement compensation, and self-employment income is subject to the tax.
Note. The threshold amounts below aren't indexed for inflation.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
When Form 8959 is required
You must file Form 8959, Additional Medicare Tax, if any one of four conditions applies. First, your Medicare wages and tips reported in box 5 of any single Form W-2 exceed $200,000. Second, your railroad retirement (RRTA) compensation reported in box 14 of any single Form W-2 exceeds $200,000. Third, your total Medicare wages and tips plus your self-employment income (including your spouse's, if married filing jointly) are greater than the threshold amount for your filing status. Fourth, your total railroad retirement (RRTA) compensation and tips (including your spouse's, if married filing jointly) exceed the threshold for your filing status. Filing the form is required even if no additional tax is ultimately due, for example because your income falls below the threshold after combining wages and self-employment, or because enough tax was already withheld. You attach Form 8959 to your return.
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, if any (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.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
Wages and self-employment income are added together
When deciding whether the 0.9% Additional Medicare Tax applies, Medicare wages and self-employment income are added together and measured against the threshold for your filing status ($250,000 for married filing jointly, $125,000 for married filing separately, and a fixed amount for single, head of household, and qualifying widow(er)). A self-employment loss is ignored for this purpose. If you have wages from employment plus self-employment income, the threshold for taxing the self-employment portion is reduced (but not below zero) by the amount of wages already subject to the tax. This prevents someone with wages just under the threshold from using self-employment losses to avoid the tax entirely. Railroad retirement (RRTA) compensation is kept separate from this calculation and is compared to the threshold on its own.
Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. A self-employment loss shouldn't be considered for purposes of this tax.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
Railroad compensation is measured on its own
Railroad retirement (RRTA) compensation is measured separately from Medicare wages when applying the 0.9% Additional Medicare Tax. Unlike wages and self-employment income, which are added together, RRTA compensation is compared on its own to the threshold for your filing status ($250,000 for married filing jointly, $125,000 for married filing separately, and a fixed amount for single, head of household, and qualifying widow(er)). There is no rule that reduces the threshold for RRTA compensation by wages you received, and there is no rule that combines RRTA compensation with self-employment income. Your railroad employer must withhold the Additional Medicare Tax once RRTA compensation it pays you exceeds the withholding threshold in the calendar year, regardless of your filing status or any other wages you receive from a different employer.
Railroad retirement (RRTA) compensation should be separately compared to the threshold.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
Nonresident aliens and Americans abroad get no special exemption
The Additional Medicare Tax applies the same way to nonresident aliens and U.S. citizens living abroad as it does to anyone else. There are no special rules that exempt these taxpayers or give them a different threshold. Wages, railroad retirement (RRTA) compensation, and self-employment income that are subject to Medicare tax are also subject to the 0.9% Additional Medicare Tax once they exceed the threshold that applies to the taxpayer's filing status, regardless of where the taxpayer lives or whether they are a U.S. citizen, resident alien, or nonresident alien. Living or working outside the United States does not change the threshold or reduce the rate.
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.
2018 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 income tax purposes, your employer must begin withholding the 0.9% Additional Medicare Tax in the exact pay period in which your cumulative wages or compensation for the calendar year first exceed $200,000. The withholding is not spread evenly over the year, and it is not delayed until the end of the year. Once it starts, the employer continues to withhold the tax in every subsequent pay period for the rest of that calendar year. This $200,000 trigger applies regardless of your filing status - so a married couple filing jointly, whose true threshold is $250,000, will still see withholding begin at $200,000 of wages at a single employer. If too much is withheld, the excess comes back as a credit when the return is filed.
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.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withheld Additional Medicare Tax comes back as a credit if you do not actually owe it
For federal income tax purposes, any Additional Medicare Tax that your employer withheld from your wages is fully refundable through the tax return - you do not lose it just because your income ultimately falls below the threshold for your filing status. If you file Form 8959 and determine that you do not actually owe the 0.9% tax, the amounts that were withheld are credited against your total tax liability on the return. The credit flows through the return and, like other withholding, produces a refund to the extent it exceeds what you owe. You cannot ask your employer to stop the withholding once it is required, but the credit mechanism ensures that over-withholding does not become a permanent cost.
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.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
Your wages eat into the threshold for your self-employment income, but RRTA pay does not
If a taxpayer has both wages and self-employment income in the same year, the threshold used to figure Additional Medicare Tax on the self-employment income is not the full amount for the taxpayer's filing status. Instead, that threshold is reduced, but not below zero, by the amount of wages already subject to Additional Medicare Tax. This means wages are tested against the threshold first, and only the threshold remaining after that reduction applies to self-employment income. There is no equivalent reduction for railroad retirement (RRTA) compensation, which is instead compared separately to its own threshold.
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.
2018 Instructions for Form 8959, Additional Medicare Tax (IRS)
Waiting to pay it with your return can trigger a penalty
For federal income tax purposes, the Additional Medicare Tax is not automatically covered by the regular income-tax withholding most employees have taken out of their paychecks. If you owe the 0.9% tax and you wait until you file your return to pay it - instead of making estimated tax payments during the year or arranging additional withholding - you may be charged a penalty for underpayment of estimated tax. The penalty is computed under the same rules that apply to any other estimated-tax shortfall, using Form 2210 (or Form 2210-F for farmers and fishermen). To avoid it, a taxpayer who expects to owe the tax should either increase withholding on Form W-4 or make quarterly estimated payments during the year.
Estimated tax penalty. You may be subject to a penalty for failure to make estimated tax payments if you owe Additional Medicare Tax and wait to pay the tax with your tax return.
2018 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.
2018 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