Is Medicare Tax withheld wrong?

[tlzhu]

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.?

[tlzhu]

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?

[tlzhu]

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]

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

[tlzhu]

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.

[le20016]

Looks to me that you are still overpaying, by paying the additional medicare tax twice - once as shown in your W2 and the second time in the Turbo Tax calculation.  As you stated, the total medicare + additional medicare tax should be $4005.  Your W2 shows you have already paid $4550. Turbotax is ensuring that you receive the $450 refund from your W2 overpayment of $4550.  But you've stated that Turbotax is also adding the additional medicare tax of $145.89 to your TurboTax calculation of taxes due, when this amount was paid in your W2 (ie,  $3860.05 + $145.89). 

I'm having a similar issue with Turbotax adding the additional medicare tax to my overall taxes due, when this was paid accurately during the year, as shown in my W2.

[AmyC]

The company withheld the tax and it is showing in your w2, just like the tax on wages. The tax return shows your wages and tax liability, even though tax was taken. The same for the additional Medicare tax. The return shows the tax and gives you credit for the tax already paid. That is how a tax return works.

@le20016