0.9% on everything over the threshold
The Additional Medicare Tax is 0.9% of wages over the threshold for your filing status. It sits on top of the ordinary Medicare rate of 1.45%, which applies to every dollar of wages with no cap, so the marginal Medicare cost above the threshold is 2.35%.
The thresholds are statutory: $200,000 for a single or head of household return, $250,000 on a joint return and $125,000 for a married-filing-separately return. They are not adjusted for inflation the way the brackets and the standard deduction are, which is why more households reach them over time without any change in the law.
The employer withholds at $200,000 whatever your status
An employer has to begin withholding the 0.9% once your wages from that employer pass $200,000 in a calendar year, without regard to the filing status on your Form W-4, and it keeps withholding through the year. Wages from businesses under common control are added together for that test, so the threshold is per employer group rather than per job.
That single employer rule is where a joint return goes wrong. Two spouses who each earn $150,000 have $300,000 between them, well over the $250,000 joint threshold, and yet neither employer holds back a cent of this tax because neither wage exceeds $200,000. The page prints the $200,000 employer line so that gap is explicit.
On a joint return the two wages are added
A joint return combines both spouses wages before the $250,000 threshold is applied, so the tax is measured against the household income rather than against each earner. Where more was withheld from one spouse than the couple owes, the excess is claimed as a credit on the return, and Form 8959 works the whole calculation out and compares it with what was withheld.
A couple can also ask for extra withholding before the fact by entering an amount on Form W-4, which is the way to cover this tax during the year instead of facing a surprise in April. Either way, the difference between what is owed and what was withheld lands in the refund or the balance due.
What is outside this page
The tax applies to wages, railroad retirement compensation and self-employment income - the self-employment side is figured on the Schedule SE as part of the self-employment tax. Retirement plan distributions, annuities and Social Security benefits are not wages, and the 3.8% on net investment income is a different tax with its own thresholds.
This page prices wage income only, using the Medicare wages you enter, and it does not price the self-employment side, the net investment income tax or any state tax. An estimate, not a return, and not tax advice.
One threshold, three ways to be surprised in April
The 0.9% is easy to compute and easy to be surprised by, because the threshold that decides whether you owe it is not the threshold your employer withholds against. Withholding starts at $200,000 of wages from that employer, regardless of filing status; the tax itself starts at $200,000 single, $250,000 joint and $125,000 married filing separately. Three gaps follow. A two-earner couple at $150,000 each owes on $50,000 and has nothing withheld. A spouse who files separately owes from $125,000 while the employer waits for $200,000. And anyone who changes jobs mid-year can pass $200,000 across two employers with neither one withholding a cent.
The fix is a W-4 line, not a different job: the extra-withholding amount on Step 4(c) covers this tax during the year instead of at filing, and Form 8959 settles it afterwards either way. The page prints the employer line beside the filing-status line so the distance between them is explicit - that distance is the part you have to fund yourself. What the page cannot price is the other 3.8%: net investment income has its own thresholds and its own form, and self-employment income reaches this tax through Schedule SE rather than through withholding.
Danfio