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When an Employer Must Withhold the Additional Medicare Tax

When an Employer Must Withhold the Additional Medicare Tax

Additional Medicare Tax applies to wages and compensation above a threshold amount received after December 31, 2012 and to self-employment income above a threshold amount received in taxable years beginning after December 31, 2012.

EzPaycheck 2013 payroll software has been updated to handle the Additional Medicare Tax Automatically. EzPaycheck payroll software starts to withhold payroll tax when employer pays an employee in excess of $200,000.  The latest version is available for free test drive at http://www.halfpricesoft.com/payroll_software_download.asp 

IRS requires an employer to withhold Additional Medicare Tax on wages it pays to an employee in excess of $200,000 in a calendar year, beginning January 1, 2013. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax because, for example, the employee’s wages together with that of his or her spouse do not exceed the $250,000 threshold for joint return filers. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

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I work for halfpricesoft.com. Halfpricesoft.com is a leading provider of easy-to-use 1099, W2 and Payroll Software solutions for accountants and small to medium size businesses. And its small business software can save user both time and money. For more information, visit http://www.halfpricesoft.com