I am head of household and my employer withheld $10,157 for Medicare. TurboTax Deluxe is calculating I need another $2,779 but that doesn't make sense. Based on my filing status (Head of Household) and the math provided by TurboTax and other instructions for Form 8959, my employer's $10,157 already includes the 1.45% on the first $200,000 + another 2.35% (=1.45% + 0.9%) on the additional $308,813 Medicare wages. In this case, why would I pay another $2,779 which is another 0.9% on the $308,813?
My math:
Total Medicare Wages = $508,813
Head of Household = $200,000
Regular medicare withholding = 1.45% * $200,000 = $2,900
Additional medicare withholding = (1.45% + 0.9%) * $308,813 = $7,257
Total medicare withholding = $10,157 (which is what my employer already withheld, shown in W2).
Or, Regular medicare withholding + additional withholding = (1.45% * $508,813) + (0.9% * $308,813) = $7338 + $2779 = $10,157 (which is what my employer already withheld).
TurboTax math:
Total Medicare Wages = $508,813
Head of Household = $200,000
Additional medicare withholding on the additional portion above Head of Household = 0.9% * $308,813 = $2,779
Total medicare withheld = $10,157 + $2,779 = $12,936.
The calculations in TurboTax are correct, but you will see that the additional tax is refunded to you on line 25(c) of your Form 1040. That is just the way the Form 8959 works, you enter the additional tax in part I and then refund it in Part V.
To view your form 1040 and schedule 1 to 3: