2021 Additional Medicare Tax Threshold
For 2021, 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 2021-01-01Source: 2021 Instructions for Form 8959 (IRS)Verified 2026-09-03
Compared with 2020
Every figure on this page is unchanged from 2020.
| Item | 2020 | 2021 | 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 and file Form 8959 with their federal income tax return.
What changed this year, and why
For 2021, the Additional Medicare Tax rate and threshold amounts remain as established. A 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that exceed the threshold amount for the taxpayer's filing status.
Common questions
- What is the Additional Medicare Tax rate for 2021?
- The rate is 0.9%.
- What is the threshold for married taxpayers filing jointly?
- The threshold is $250,000.
- What is the threshold for married taxpayers filing separately?
- The threshold is $125,000.
- Are the threshold amounts adjusted for inflation?
- No. The IRS notes that the Additional Medicare Tax threshold amounts are not indexed for inflation.
Your employer withholds at $200,000 whatever your filing status
It begins withholding in the first pay period your year-to-date wages or compensation cross $200,000 and continues through the end of the calendar year. Because the $200,000 withholding threshold is fixed and does not match the $250,000 joint or $125,000 married-filing-separately thresholds, a taxpayer whose total income is below their filing-status threshold may have tax withheld anyway and can claim a credit on Form 8959. You cannot ask your employer to stop the 0.9% withholding once it has begun. If your combined wages and self-employment income put you above the $250,000 or $125,000 threshold, you may still owe more than was withheld and must cover the rest through estimated payments or withholding on other income.
Your employer is responsible for withholding the 0.9% Additional Medicare Tax on your Medicare wages or RRTA compensation paid in excess of $200,000 in a calendar year.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
These thresholds do not move with inflation
The threshold amounts for the Additional Medicare Tax are fixed by statute and do not increase with inflation. The $250,000 amount for married taxpayers filing jointly and the $125,000 amount for married taxpayers filing separately remain constant until Congress changes them. Unlike many other tax figures that are adjusted annually for cost-of-living increases, these thresholds stay the same year after year. This means that as wages and self-employment income rise over time, more taxpayers may find themselves above the threshold and subject to the 0.9% tax even if their real income has not grown. Taxpayers should not assume the threshold will go up each year; they must use the amounts shown in the IRS chart for the specific tax year when determining whether they owe the tax or need to file Form 8959. The lack of inflation indexing is an important structural feature of the tax that can broaden its reach over time without any legislative action.
Note. The threshold amounts below aren't indexed for inflation.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
When Form 8959 is required
The IRS requires you to file Form 8959 if any one of several conditions is met. You must file if your Medicare wages and tips reported on any single Form W-2 exceed the employer withholding trigger amount, if your Railroad Retirement Tax Act compensation on any single Form W-2 exceeds that same trigger, if your combined Medicare wages and self-employment income exceed the threshold for your filing status, or if your combined Railroad Retirement Tax Act compensation exceeds the threshold for your filing status. For married couples filing jointly, both spouses' amounts are combined when testing against the $250,000 threshold. Even if your employer did not withhold the 0.9% Additional Medicare Tax at all, you still must file the form if your total income exceeds the applicable threshold. The form reconciles what was withheld against what you actually owe, which may result in a credit for excess withholding or a balance due for any shortfall.
You must file Form 8959 if one or more of the following applies to you.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
Wages and self-employment income are added together
For purposes of determining whether a taxpayer's income exceeds the applicable threshold amount for the Additional Medicare Tax, Medicare wages and self-employment income are added together as a single combined figure. The threshold is not applied separately to wages and to self-employment income; instead, the two categories are summed and the total is compared to the threshold for the taxpayer's filing status. A self-employment loss is not taken into account when making this comparison. By contrast, Railroad Retirement Tax Act compensation is treated differently and must be compared to the threshold on its own, separate from wages and self-employment income. This combining rule means that a taxpayer who has wages below the threshold and self-employment income also below the threshold may still owe the 0.9% tax when the two amounts together push total income above the applicable limit.
Medicare wages and self-employment income are combined to determine if your income exceeds the threshold.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
Railroad compensation is measured on its own
Railroad Retirement Tax Act compensation is not added to Medicare wages or self-employment income when measuring whether a taxpayer owes the Additional Medicare Tax. Instead, such compensation is compared to the applicable filing-status threshold entirely on its own. This means a railroad employee must run a separate calculation for their Railroad Retirement Tax Act compensation, independent of any wages or self-employment income they may also have. An employer that pays Railroad Retirement Tax Act compensation must withhold the 0.9% tax once that compensation alone exceeds the employer-level trigger in a calendar year, regardless of the employee's filing status. Because this compensation is measured separately, it does not reduce the threshold available for self-employment income the way regular Medicare wages do. A railroad employee could owe the tax on their compensation even though their combined wages and self-employment income fall below the $250,000 joint threshold or $125,000 married-filing-separately threshold, or vice versa.
RRTA compensation should be separately compared to the threshold.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
Nonresident aliens and Americans abroad get no special exemption
For federal Additional Medicare Tax purposes, nonresident aliens and U.S. citizens living abroad are treated the same as anyone else living in the United States. There is no separate threshold, exclusion, or reduced rate simply because a taxpayer lives outside the country or holds a nonimmigrant visa. Any Medicare wages, Railroad Retirement Tax Act compensation, or self-employment income that is already subject to regular Medicare tax will also be subject to the 0.9% surtax once it exceeds the applicable threshold - in 2021, $250,000 for married filing jointly and $125,000 for married filing separately. In other words, expats and nonresident aliens who owe Medicare tax on their earnings owe the additional tax on those same earnings above the threshold, with no special exemption.
There are no special rules for Additional Medicare Tax for nonresident aliens and U.S. citizens living abroad. Wages, 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.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withholding starts the pay period your wages cross $200,000, not spread over the year
Employers must start withholding the 0.9% Additional Medicare Tax in the specific pay period when your cumulative wages or compensation for the year first exceed $200,000. Once withholding begins in that pay period, it continues in every subsequent pay period for the rest of the calendar year. The withholding is not spread evenly across the entire year or calculated based on your annual income. This means if your wages cross the $200,000 threshold mid-year, your employer begins withholding the additional tax only from that point forward, applying it to each paycheck for the remainder of the year.
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.
2021 Instructions for Form 8959, Additional Medicare Tax (IRS)
Withheld Additional Medicare Tax comes back as a credit if you do not actually owe it
Even if your employer correctly withheld the 0.9% Additional Medicare Tax from your paychecks, you may not actually owe any of it when you file your return - for example, if your combined income falls below the threshold for your filing status, such as $250,000 for married filing jointly or $125,000 for married filing separately. In that situation, the amount that was withheld is not lost. You claim it as a credit on your federal income tax return, where it is treated as a payment against the tax you owe. If the credit exceeds your total liability, the excess is refunded to you. Form 8959 is used to reconcile the amount withheld with the amount actually owed so the credit flows correctly onto your return.
Use Form 8959 to figure the amount of Additional Medicare Tax you owe and the amount of Additional Medicare Tax withheld by your employer, if any. You will carry the amounts to one of the following returns.
2021 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 automatically withheld in full by an employer, and some taxpayers - particularly those with self-employment income, multiple jobs, or a spouse whose combined wages push the household above the threshold - may end up owing the tax when they file. If you wait until you file your return to pay the tax instead of making estimated tax payments during the year, you may be subject to a penalty for failure to make estimated tax payments. The IRS treats the additional tax like any other tax that must be paid as you earn the income. To determine whether the penalty applies to you, use Form 2210 (or Form 2210-F for farmers and fishermen) and its separate instructions. In 2021, the thresholds were $250,000 for married filing jointly and $125,000 for married filing separately.
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. See Form 2210 (or Form 2210-F for farmers and fishermen) and its separate instructions to determine if the penalty applies to you.
2021 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.
2021 Instructions for Form 8959 (IRS)
- Rate
A 0.9% Additional Medicare Tax applies to your Medicare wages,
- 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