2020 Additional Medicare Tax Threshold
For 2020, 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 2020-01-01Source: 2020 Instructions for Form 8959 (IRS)Verified 2026-09-03
Compared with 2019
Every figure on this page is unchanged from 2019.
| Item | 2019 | 2020 | 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 are married filing jointly or married filing separately and owe Additional Medicare Tax on wages, railroad retirement compensation, or self-employment income above the applicable threshold.
What changed this year, and why
For tax year 2020, the Additional Medicare Tax threshold amounts are $250,000 for married filing jointly and $125,000 for married filing separately. The tax rate is 0.9%.
Common questions
- What is the Additional Medicare Tax and when does it apply?
- You owe the tax on Medicare wages, railroad retirement compensation, and self-employment income that exceed the threshold for your filing status: $250,000 for married filing jointly and $125,000 for married filing separately.
- Are these threshold amounts adjusted for inflation?
- No. The threshold amounts are not indexed for inflation and have remained the same since the tax was enacted.
Your employer withholds at $200,000 whatever your filing status
Regardless of your filing status or the threshold that ultimately applies to you, your employer begins withholding the Additional Medicare Tax once your Medicare wages or railroad retirement compensation from that employer exceed $200,000 in a calendar year. The employer must start withholding in the pay period where your wages or compensation for the year cross $200,000 and must continue withholding in every subsequent pay period through the end of the calendar year. Because the employer uses a single $200,000 trigger without regard to whether you are single, married filing jointly, or married filing separately, a married couple each earning $200,000 from different employers will have the 0.9% tax withheld by each employer even though their combined income exceeds the $250,000 joint threshold. You cannot ask your employer to stop withholding once it is required to begin. If too much is withheld relative to your actual liability based on your filing status, you claim the excess as a credit on your tax return when you file Form 8959.
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.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
These thresholds do not move with inflation
The threshold amounts used to decide whether you owe Additional Medicare Tax are fixed in statute and are not adjusted for inflation. For 2020 the thresholds remain: $250,000 for married filing jointly, $125,000 for married filing separately, and a single amount for all other filing statuses. Because the figures do not rise with prices, over time more taxpayers may find themselves above a threshold even when their real purchasing power has not increased. Congress would have to pass new legislation to change the dollar levels; the IRS cannot update them through guidance. When planning, use the current year's published figures rather than assuming they will match any prior year.
Note. The threshold amounts below aren't indexed for inflation.
2020 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 several conditions is met during the year. The first is that your Medicare wages and tips reported on any single Form W-2 exceed a specified amount. The second is that your railroad retirement compensation reported on any single Form W-2 exceeds that same amount. The third is that your total Medicare wages and tips plus your self-employment income exceed the threshold for your filing status, which may be $250,000 for married filing jointly or $125,000 for married filing separately. The fourth is that your total railroad retirement compensation and tips exceed that same filing-status threshold. Meeting any one of these tests requires the form, even if you ultimately do not owe additional tax after credits for amounts already withheld.
Who Must File You must file Form 8959 if one or more of the following applies to you.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Wages and self-employment income are added together
For purposes of the Additional Medicare Tax, your Medicare wages and your self-employment income are added together and compared to the threshold that applies to your filing status. A self-employment loss is not counted in this comparison. This means that both sources of earned income are tested jointly against the threshold; if the sum exceeds the threshold, the 0.9% tax applies to the excess. Wages reduce the self-employment side of the calculation but never increase it: if your combined income is below the threshold, no Additional Medicare Tax is owed on either component. Railroad retirement compensation is handled on its own track and is not lumped in with wages and self-employment income.
Medicare wages and self-employment income are combined to determine if your income exceeds the threshold.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Railroad compensation is measured on its own
Railroad retirement compensation subject to the Railroad Retirement Tax Act is measured on its own line and is not added to your Medicare wages or self-employment income when applying the Additional Medicare Tax. It is separately compared to the threshold that matches your filing status. Each amount is tested separately against the threshold. The 0.9% tax applies to the RRTA compensation only to the extent it exceeds the threshold on its own, and likewise for the wages side. There is no rule that reduces the RRTA compensation by the amount of wages subject to the tax, the way self-employment income is reduced by wages.
Railroad retirement (RRTA) compensation should be separately compared to the threshold.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Nonresident aliens and Americans abroad get no special exemption
For purposes of the 0.9% Additional Medicare Tax, nonresident aliens and U.S. citizens living outside the United States are treated the same as anyone else living and working stateside. There is no separate threshold, no exclusion for foreign earned income, and no reduced rate simply because the taxpayer is abroad or a nonresident. Any wages, railroad retirement compensation, or self-employment income that is already subject to regular Medicare tax is also counted toward the applicable threshold ($250,000 for married filing jointly, $125,000 for married filing separately) and becomes subject to the Additional Medicare Tax once it exceeds that threshold. In other words, an American working overseas or a nonresident alien working in the United States cannot skip this tax on the basis of their filing status or location; the same 0.9% rate and the same thresholds apply to all taxpayers who are otherwise subject to Medicare tax on the underlying income.
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.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withholding starts the pay period your wages cross $200,000, not spread over the year
Once an employee's cumulative Medicare wages or railroad retirement compensation from a single employer exceed $200,000 during a calendar year, the employer must start withholding the 0.9% Additional Medicare Tax in the specific pay period in which that threshold is crossed - not gradually, and not at the end of the year. The employer then continues withholding from every subsequent pay period through the end of the calendar year. This withholding trigger is always $200,000 regardless of the employee's filing status; the higher thresholds of $250,000 for married filing jointly or $125,000 for married filing separately are used only when computing the actual tax on the return. Because the withholding rule uses a single flat amount, some employees - particularly married couples filing jointly with combined income above $200,000 but below $250,000, or married taxpayers filing separately - may have more or less withheld than their true liability. Any over-withholding is recoverable as a credit on the tax return.
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 toCAUTION ! 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.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withheld Additional Medicare Tax comes back as a credit if you do not actually owe it
Employees sometimes find that their employer withheld Additional Medicare Tax even though, after considering their filing status and total income, they do not actually owe the 0.9% tax. For example, a married couple filing jointly with combined income at or below the $250,000 threshold may still have had tax withheld at each job if both spouses earned enough individually to trigger employer withholding. Similarly, a married taxpayer filing separately whose income falls at or below the $125,000 threshold may have had withholding taken at work. In any case where the taxpayer ultimately owes no Additional Medicare Tax, the IRS allows them to claim a full credit for the amount that was withheld. This credit is applied against the total tax liability shown on the return by filing Form 8959. Taxpayers cannot ask their employer to stop withholding once the employer is required to do so, so the credit mechanism is the way to recover amounts that were collected but should not have been owed based on the taxpayer's actual liability.
You can't ask your employer to stop Additional Medicare Tax withholding if it is required to withhold it. 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.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Your wages eat into the threshold for your self-employment income, but RRTA pay does not
Under the 2020 Additional Medicare Tax rules published by the IRS, self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. This means that wages received from employment lower the threshold available for self-employment income. For example, if a taxpayer filing married filing jointly has wages that exceed part of the $250,000 threshold, only the remaining portion of that threshold applies to their self-employment income. However, there is no equivalent rule for railroad retirement (RRTA) compensation. Railroad pay does not reduce the threshold for self-employment income, so a taxpayer with RRTA compensation and self-employment income can use the full threshold amount for their self-employment income regardless of their railroad wages.
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.
2020 Instructions for Form 8959, Additional Medicare Tax (IRS)
Waiting to pay it with your return can trigger a penalty
Waiting to pay the 0.9% Additional Medicare Tax when you file your return - rather than through withholding or estimated tax payments during the year - can trigger an estimated tax penalty. The IRS warns that taxpayers who owe Additional Medicare Tax and wait to pay it with their tax return may be subject to a penalty for failure to make estimated tax payments. The penalty is calculated using Form 2210 (or Form 2210-F for farmers and fishermen) and its separate instructions. Unlike regular income tax, which employers may withhold from wages, Additional Medicare Tax is only withheld once wages from a single employer exceed a certain amount during the calendar year. Taxpayers with self-employment income, multiple employers, or income below the withholding threshold may need to make estimated tax payments throughout the year to cover the Additional Medicare Tax they expect to owe, otherwise they risk a penalty even if they pay the full amount when they file.
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.
2020 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.
2020 Instructions for Form 8959 (IRS)
- Rate
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