Insights

We are proud to be named a West Coast Regional Leader for 2024

Understanding the Extra Medicare Payroll Tax: A Guide for Employers and Employees

ARTICLE | September 03, 2024

Authored by Vasquez + Company


While most employers are familiar with FICA taxes, many overlook the additional Medicare surtax that applies to higher-income employees. This article, "Don’t Overlook the Extra Medicare Payroll Tax," outlines the structure of FICA, including Social Security and Medicare taxes, and emphasizes the importance of withholding the extra 0.9% surtax for employees earning above certain thresholds.

Key Points

  • Understanding FICA: The Federal Insurance Contributions Act (FICA) encompasses Social Security and Medicare taxes, each with distinct rates and purposes.
  • Medicare Surtax: A 0.9% surtax applies to high earners, with thresholds varying based on filing status.
  • Employer Responsibilities: Employers must accurately withhold this surtax from qualifying employees' wages, or they risk liability for penalties.
  • Awareness and Compliance: It’s crucial for employers to inform payroll staff and ensure correct withholding practices are followed to avoid tax-related issues.

For further insights and compliance strategies, read the full article here.

 


Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

Let's Talk!

Call us at +1 213.873.1700, email us at solutions@vasquezcpa.com or fill out the form below and we'll contact you to discuss your specific situation.

  • Topic Name:
  • Should be Empty:

​Vasquez + Company LLP has over 50 years of experience in performing audit, tax, accounting, and consulting services for all types of nonprofit organizations, governmental entities, and private companies. We are the largest minority-controlled accounting firm in the United States and the only one to have global operations and certified as MBE with the Supplier Clearinghouse for the Utility Supplier Diversity Program of the California Public Utilities Commission.

For more information on how Vasquez can assist you, please email solutions@vasquezcpa.com or call +1.213.873.1700.

Subscribe to receive important updates from our Insights and Resources.

  • Should be Empty: