Is Medicare Tax withheld wrong?

Forum|Forum|2 years ago
April 10, 2024
8 replies
92 views

I am doing my 2023 Federal Income tax, and find an error (maybe) in Medicare Tax withheld calculation in TurboTax.

My W2 Info:

1. Wages: $236,471

5. Medicare Wages: $266,210.

6. Medicare tax withheld: $4,455.93

The standard Medicare tax rate is 1.45%, which means my Medicare tax withheld should have been $3860.05.

The 0.9% additional Medicare tax over $250,000 for Joint filing adds an additional tax with held of $145.89. So my total Medicare Tax withheld should have been $4005.94.

But TurboTax does not recognizes the over payment, but rather asks me to pay the additional 0.9% or $145.89 as additional tax.

Does TurboTax has a bug here or am I missing something here.

Thanks a lot.?

tlzhuAuthor

Level 2

I just figured out that the company withheld the 1.45% standard Medicare tax withheld, plus the additional Medicare tax over the income of $200,000. So I am definitely over paid the Medicare Tax. TurboTax does have a bug here. Now how can I get the overpayment back using TurboTax, instead of paying the mistakenly calculated additional 0.9% over the $250,000 income that TurboTax?

tlzhuAuthor

Level 2

I totally figured this out. There is no bug in TurboTax here. TurboTax does ask me to pay the correct additional 0.9% based on my filing status. It then provides a withholding reconciliation to give me back the wrongly- withheld Medicare Tax. Overall, I got my $450 back.

vjtones

Level 2

Hi, I have the same issue. Can you please advise where/how you can see the witholding reconciliation? Thanks.

tlzhuAuthor

Level 2

Sorry for the late reply. Was out of town for the weekend. Hope it's not too late.

You can view the reconciliation on Form 8959. You will see the additional Medicare tax you need to pay based on the correct Filing Status. Then on lines 22 and 24, you will get back the Medicare tax that was over paid on your W-2.