Additional Medicare tax - Already paid through employer

[gaylav]

I have paid the additional medicare tax through my employer and it shows correctly on my W-2, however Turbotax is calculating it again and adding it as additional taxes owed - how can I correct this?

[DawnC]

If your income exceeds the thresholds below, TurboTax is reporting it correctly.   Did you have self-employment or multiple W-2s?

A 0.9% Additional Medicare tax applies to Medicare wages, self-employment income, and railroad retirement (RRTA) compensation that exceed the following threshold amounts based on filing status:

• $250,000 for married filing jointly;
• $125,000 for married filing separately; and
• $200,000 for all other taxpayers.

An employer must withhold Additional Medicare Tax from wages it pays to an individual in excess of $200,000 in a calendar year, without regard to the individual’s filing status or wages paid by another employer. 

An individual may owe more than the amount withheld by the employer, depending on the individual’s filing status, wages, compensation, and self-employment income. In that case, the individual should make estimated tax payments and/or request additional income tax withholding using Form W-4, Employee's Withholding Certificate.

You can't request additional Medicare tax be withheld, but you can request more income tax be withheld.  See IRS Q and A on this topic.  

If you anticipate that you will owe Additional Medicare Tax but will not satisfy the liability through Additional Medicare Tax withholding and did not request additional income tax withholding using Form W-4, you may need to make estimated tax payments. 

[gaylav]

We have two W-2's:

W-2 #1 income is 353k - over the 200k and additional medicare was taken out

W-2 #2 income is 133k - under the 200k limit 

So now in the worksheet, since the limit is $250k I have to pay another $748 additional medicare even though W-2 never met the threshold (133k-50k * .9%). Shouldn't W-2 #2 be excluded since it didn't meet the threshhold?

[DawnC]

No, the threshold is total wages per year, not per W-2.    If you have multiple jobs this year, you need to have extra tax withheld from your pay, or make estimated tax payments.   You owe the .09% on all the $133K.    We automatically add Form 8959 to your return if your income exceeds the threshold amount for your filing status.

[gaylav]

The W2s are for a husband and wife filing jointly, so I should not have to pay on the 133k right?

[DianeW777]

No, that's not correct.  The rule for the income threshold is based on filing status (noted by @DawnC in this thread).

Who Must File

You must file Form 8959 if one or more of the following applies to you.

1. Your Medicare wages and tips on any single Form W-2 (box 5) are greater than $200,000.
2. Your RRTA compensation on any single Form W-2 (box 14) is greater than $200,000.
3. Your total Medicare wages and tips plus your self-employment income, if any (including the Medicare wages and tips and self-employment income of your spouse, if married filing jointly), are greater than the threshold amount for your filing status in the Threshold Amounts for Additional Medicare Tax chart.
4. Your total RRTA compensation and tips (Form W-2, box 14) (including the RRTA compensation and tips of your spouse, if married filing jointly) is greater than the threshold amount for your filing status in the Threshold Amounts for Additional Medicare Tax chart.

@gaylav