The Additional Medicare Tax is a 0.9% tax on earned income above set thresholds, and whether you owe it depends on your filing status and combined household income, not on what any single employer withholds. It applies to Medicare wages, self-employment income, and Railroad Retirement (RRTA) compensation once those earnings cross the limit for your filing status.
The Additional Medicare Tax is a flat 0.9% tax on Medicare wages, self-employment income, and RRTA compensation above fixed 2026 thresholds: $250,000 married filing jointly, $125,000 married filing separately, and $200,000 for everyone else. Employees and the self-employed pay it with no employer match, and it is computed on Form 8959 (Source: IRS Topic No. 560, 2026).
What is the Additional Medicare Tax?
The Additional Medicare Tax is a 0.9% tax that took effect January 1, 2013 to help fund provisions of the Affordable Care Act (Source: IRS, Affordable Care Act Tax Provisions). It sits on top of the regular 1.45% employee Medicare tax and applies only to earned income above a filing-status threshold: Medicare wages, self-employment income, and RRTA compensation. Investment income is not subject to it (Source: IRS Topic No. 560, 2026).
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The regular 1.45% Medicare tax is matched by the employer and applies to every wage dollar. The 0.9% is different: it applies only above the threshold and carries no employer match, so the entire 0.9% falls on the worker (Source: IRS Questions and Answers for the Additional Medicare Tax, 2026).
Above the threshold, an employee’s combined Medicare rate is 2.35% (the 1.45% base plus 0.9%). A self-employed person, who pays the 2.9% Medicare portion of self-employment tax, reaches a combined 3.8% above the threshold (2.9% plus 0.9%) (Source: IRS, Self-Employment Tax; IRS Questions and Answers for the Additional Medicare Tax, 2026).
Who pays it: 2026 income thresholds by filing status
You are liable for the 0.9% Additional Medicare Tax once your Medicare wages, self-employment income, and RRTA compensation exceed the threshold for your filing status. For 2026 the thresholds are $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for single, head of household, and qualifying surviving spouse filers (Source: IRS Topic No. 560, 2026).
| Filing status | 2026 threshold | Rate above threshold |
|---|---|---|
| Married filing jointly | $250,000 | 0.9% |
| Single | $200,000 | 0.9% |
| Head of household | $200,000 | 0.9% |
| Qualifying surviving spouse | $200,000 | 0.9% |
| Married filing separately | $125,000 | 0.9% |
The tax applies only to the earned income above the threshold, not to your whole income. A single filer with $230,000 of Medicare wages owes 0.9% on the $30,000 over the $200,000 threshold, which is $270, not 0.9% of the full $230,000 (Source: 2025 Instructions for Form 8959).
Why the 2026 thresholds never change
The $200,000, $250,000, and $125,000 thresholds are written into the statute as fixed dollar amounts and are not adjusted for inflation. The law sets $250,000 for a joint return, one-half of that ($125,000) for a married taxpayer filing separately, and $200,000 in any other case, with no cost-of-living provision anywhere in the section (Source: 26 U.S.C. 3101(b)(2), Cornell Legal Information Institute).
Because the amounts have stayed at their original levels since the tax took effect in 2013, ordinary wage growth pulls more households over the line each year, a form of bracket creep (Source: IRS, Affordable Care Act Tax Provisions). By contrast, the IRS raises many retirement figures annually; the 401(k) elective deferral limit rose to $24,500 for 2026 (Source: IRS Notice 2025-67). None of those annual adjustments touch the Additional Medicare Tax thresholds. Our 2026 retirement contribution limits guide covers the figures that do change.
Employer withholding vs. what you actually owe
An employer must withhold the extra 0.9% on any wages it pays a single employee above $200,000 in a calendar year, without regard to filing status, a spouse’s income, or wages from other employers. Withholding starts in the pay period in which year-to-date wages pass $200,000 and continues through year-end. That $200,000 is a withholding trigger, not a measure of your liability (Source: IRS Topic No. 560, 2026).
An employer is liable for the Additional Medicare Tax it was required to withhold whether or not it deducted the tax, but the employee still owes the tax regardless of whether it was withheld. Employers report the withholding on Form 941 (line 5d) and include it in the total Medicare tax shown in Box 6 of the W-2 (Source: IRS Questions and Answers for the Additional Medicare Tax, 2026; IRS Instructions for Form 941, Rev. March 2026).
The married-couple gap
Because withholding uses a single $200,000 trigger while joint filers share a $250,000 threshold, a two-earner couple can owe tax no employer withheld. Suppose two spouses each earn $150,000 in Medicare wages. Neither individually reaches $200,000, so neither employer withholds anything extra (Source: IRS Topic No. 560, 2026).
Their combined $300,000 is $50,000 above the $250,000 joint threshold, so the couple owes 0.9% on $50,000, about $450, as a balance due when they file (Source: 2025 Instructions for Form 8959).
The two-jobs gap and estimated tax
The same mismatch hits one person with two jobs. A single filer earning $120,000 at each of two employers has $240,000 in wages, but neither job reaches the $200,000 trigger, so nothing extra is withheld. That filer owes 0.9% on the $40,000 above the $200,000 single threshold, which is $360 (Source: IRS Topic No. 560, 2026).
To cover a shortfall like this before filing, the rules allow a taxpayer to request additional withholding by submitting a new Form W-4 to one employer, or to make quarterly estimated tax payments. Which fits depends on individual circumstances (Source: IRS Questions and Answers for the Additional Medicare Tax, 2026).
How to calculate the Additional Medicare Tax
To figure the tax, subtract your filing-status threshold from your earned income of that type and multiply the excess by 0.9%. Wages, self-employment income, and RRTA compensation each have their own part on Form 8959, and self-employment losses are not counted (Source: 2025 Instructions for Form 8959).
When you have both wages and self-employment income, the self-employment threshold is first reduced (but not below zero) by your total Medicare wages, so the two income types do not each get a full separate threshold. The IRS illustrates this with a married-filing-separately taxpayer, Don:
- Don has $200,000 in Medicare wages and $150,000 in self-employment income; his MFS threshold is $125,000.
- On wages: $200,000 minus the $125,000 threshold equals $75,000 subject to the tax.
- Reduce the self-employment threshold by wages: $125,000 minus $200,000, floored at zero, equals $0.
- On self-employment income: all $150,000 exceeds the $0 reduced threshold, so the full $150,000 is subject to the tax.
- Total subject to 0.9%: $225,000, for $2,025 of Additional Medicare Tax.
RRTA compensation is treated separately from wages. A single railroad employee with $250,000 of RRTA compensation subtracts the $200,000 threshold to reach $50,000, then applies 0.9% for $450 (Source: IRS Questions and Answers for the Additional Medicare Tax, 2026; 2025 Instructions for Form 8959).
Reporting and reconciling it on Form 8959
Form 8959 is where the 0.9% is computed and reconciled against amounts already withheld. Part I applies your threshold to Medicare wages, Part II covers self-employment income, and Part III covers RRTA compensation; a later part reconciles the Additional Medicare Tax your employer withheld. The result flows to Form 1040 (Source: IRS About Form 8959; 2025 Instructions for Form 8959).
The form pulls Medicare wages from W-2 Box 5, RRTA compensation from W-2 Box 14, and self-employment income from Schedule SE, and it includes unreported tips from Form 4137 and wages from Form 8919. Additional Medicare Tax that was withheld is carried to Form 1040 line 25c along with federal income tax withholding (Source: 2025 Instructions for Form 8959).
Reconciliation matters because withholding rarely matches the amount owed. An employer must withhold once wages pass $200,000 even if your filing status means you owe less, so you can be over-withheld and receive the excess through your 1040. Two-earner couples and people with multiple jobs are often under-withheld and owe the difference. Either way, Form 8959 settles it, producing a refund or a balance due (Source: 2025 Instructions for Form 8959).
Additional Medicare Tax vs. the 3.8% Net Investment Income Tax
The 0.9% Additional Medicare Tax and the 3.8% Net Investment Income Tax (NIIT) are separate taxes, both of which took effect January 1, 2013 under the Affordable Care Act, and a household can owe both, but never on the same dollar (Source: IRS, Affordable Care Act Tax Provisions). The 0.9% hits earned income on Form 8959; the 3.8% hits investment income on Form 8960 (Source: IRS Topic No. 559, 2026; IRS Topic No. 560, 2026).
| Feature | Additional Medicare Tax | Net Investment Income Tax |
|---|---|---|
| Rate | 0.9% | 3.8% |
| Income taxed | Medicare wages, self-employment income, RRTA compensation | Interest, dividends, capital gains, rents, royalties, non-qualified annuities |
| 2026 thresholds | $250k MFJ / $125k MFS / $200k other, by earned income | Same dollar limits, measured by MAGI |
| Tax form | Form 8959 | Form 8960 |
| Applies to wages? | Yes | No |
| Can you owe both? | Yes, but never on the same income | |
The IRS states that the NIIT is not applicable to wages, RRTA compensation, or self-employment income, and that the Additional Medicare Tax applies only to those earned-income categories (Source: IRS Questions and Answers for the Additional Medicare Tax, 2026). So a high earner with a large salary and a taxable brokerage account can face the 0.9% on wages and the 3.8% on investment income in the same year. Q3 Advisors maintains a separate explainer on the Net Investment Income Tax for 2026.
How this connects to Roth conversion planning
A traditional-to-Roth conversion is included in gross income as ordinary income in the year of conversion and is treated as a distribution, not as wages or compensation. Because the Additional Medicare Tax applies only to wages, RRTA compensation, and self-employment income, the converted amount is not itself subject to the 0.9%, and it is not net investment income for the 3.8% NIIT (Source: IRS Publication 590-A; IRS Topic No. 559, 2026).
A conversion does raise adjusted gross income and MAGI, however, which can push other investment income over the NIIT threshold and can raise Medicare premiums through IRMAA. One approach some retirees study with a professional is the timing of a Roth conversion relative to years when earned income and these thresholds interact; related MAGI effects appear in our 2026 Medicare IRMAA brackets guide (Source: IRS Publication 590-A; CMS 2026 Medicare Parts A & B fact sheet).
Work with Q3 Advisors
Q3 Advisors is a registered investment adviser focused on retirement tax planning. This article is educational and is not advice; for guidance on your own circumstances, consult a qualified tax or financial professional.
Frequently asked questions
These answers cover the questions people most often ask about the 0.9% Additional Medicare Tax for 2026: the rate, the income thresholds by filing status, whether an employer contributes, how to calculate it on Form 8959, refunds of over-withholding, how it differs from the Net Investment Income Tax, and how it works for married couples filing jointly.
What is the additional Medicare tax rate for 2026?
The rate for 2026 is 0.9% on earned income above the applicable threshold. Combined with the regular 1.45% employee Medicare tax, the employee rate above the threshold is 2.35%. For self-employed people, whose regular Medicare portion is 2.9%, the combined Medicare rate above the threshold is 3.8% (2.9% plus 0.9%) (Source: IRS, Self-Employment Tax; IRS Questions and Answers for the Additional Medicare Tax, 2026).
At what income does the additional Medicare tax kick in?
For 2026 it begins once earned income passes your filing-status threshold: $250,000 married filing jointly, $125,000 married filing separately, and $200,000 for single, head of household, and qualifying surviving spouse filers. Employers separately begin withholding at $200,000 per employee regardless of filing status, which can differ from your actual liability (Source: IRS Topic No. 560, 2026).
Does the employer pay any of the additional Medicare tax?
No. There is no employer match for the 0.9% Additional Medicare Tax, unlike the regular 1.45% Medicare tax, which the employer does match. An employer’s only role is to withhold the extra 0.9% on wages it pays an employee above $200,000 in a year and to report it. If it fails to withhold, it can be liable, yet the employee still owes the tax (Source: IRS Topic No. 560, 2026).
How do I calculate the additional Medicare tax?
Subtract your filing-status threshold from your earned income of that type, then multiply the excess by 0.9%. If you have both wages and self-employment income, reduce the self-employment threshold (not below zero) by total Medicare wages first. Self-employment losses are not counted. Form 8959 walks through each step (Source: 2025 Instructions for Form 8959).
What is Form 8959 used for?
Form 8959 is used to figure the Additional Medicare Tax on wages, self-employment income, and RRTA compensation, and to reconcile any Additional Medicare Tax an employer withheld. The result carries to Form 1040, with withheld amounts flowing to line 25c alongside federal income tax withholding (Source: IRS About Form 8959; 2025 Instructions for Form 8959).
Can I get a refund of additional Medicare tax that was withheld?
Yes, potentially. Because an employer must withhold once wages pass $200,000 regardless of filing status, you can be over-withheld. Form 8959 reconciles what was withheld against what you actually owe, and any excess is credited on your Form 1040, which can produce a refund or reduce a balance due (Source: 2025 Instructions for Form 8959).
Is the additional Medicare tax the same as the net investment income tax?
No. The Additional Medicare Tax is 0.9% on earned income, reported on Form 8959. The Net Investment Income Tax is 3.8% on investment income such as interest, dividends, and capital gains, reported on Form 8960. They are separate taxes with the same threshold amounts, and a household can owe both in the same year on different income (Source: IRS Topic No. 559, 2026; IRS Topic No. 560, 2026).
How does the additional Medicare tax work for married couples filing jointly?
Their threshold is $250,000 of combined earned income. Because each employer withholds only on wages above $200,000 individually, a two-earner couple can owe tax no employer withheld. For example, two spouses each earning $150,000 have $300,000 combined and owe 0.9% on the $50,000 above $250,000 at filing (Source: IRS Topic No. 560, 2026; 2025 Instructions for Form 8959).
Sources
IRS Topic No. 560, Additional Medicare Tax (irs.gov/taxtopics/tc560). IRS, Questions and Answers for the Additional Medicare Tax (irs.gov/businesses/small-businesses-self-employed/questions-and-answers-for-the-additional-medicare-tax). IRS, Affordable Care Act Tax Provisions (irs.gov/affordable-care-act/affordable-care-act-tax-provisions). IRS, Self-Employment Tax (Social Security and Medicare Taxes) (irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes). IRS, 2025 Instructions for Form 8959 (irs.gov/instructions/i8959). IRS, About Form 8959 (irs.gov/forms-pubs/about-form-8959). IRS, Instructions for Form 941 (Rev. March 2026) (irs.gov/instructions/i941). IRS Topic No. 559, Net Investment Income Tax (irs.gov/taxtopics/tc559). 26 U.S.C. 3101(b)(2), Cornell Legal Information Institute (law.cornell.edu/uscode/text/26/3101). IRS Publication 590-A (irs.gov/publications/p590a). IRS Notice 2025-67 (2026 retirement limits). CMS, 2026 Medicare Parts A & B Premiums and Deductibles fact sheet.
