High earners face Additional Medicare Tax starting 2025

High-income earners may be subject to the Additional Medicare Tax, a 0.9% tax on earnings above certain thresholds. These thresholds vary based on tax filing status and include wages, tips, and self-employment income. Employers must withhold this tax if an employee earns over $200,000 in a year, regardless of joint filing status. Individuals with multiple jobs may need to calculate and pay the tax when filing their returns if no single employer withheld it. Taxpayers use Form 8959 to calculate the Additional Medicare Tax, which is filed with Form 1040 or 1040-SR. Employers report withheld amounts on Form W-2. Planning ahead can help avoid surprises during tax season.