2013 Additional Medicare Tax

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Posted on by Judi Detjen

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Are there any instructions about how to setup the Additional Medicare Tax of 0.9 percent that applies to wages and compensation above a threshold amount received after December 31, 2012?

Thanks,

Judi

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Judi,

The way this will be set up has yet to be passed to support so I don't yet know how that setup will be.

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Judi Detjen 477 on at

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Do you know when this will happen or will they instructions at all for this?

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I don't know. I would guess we will put something out for the states that changed even if the federal govt doesn't get their changes ready by year end.

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Judi Detjen 477 on at

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This has nothing to do with federal tax rates which hasn't been decided yet. This is a new Obamacare tax that the IRS already has issued information about

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I don't know yet how any tax changes are going to be handled for next year. We had hoped to have them last week but that didn't happen. We know that everyone needs the changes before the new year.

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Tax updates should be available within the next hour or two at these locations.

mbs.microsoft.com/.../sldec12tax.htm

mbs.microsoft.com/.../sldec12tax.htm

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Judi Detjen 477 on at

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Elaine,

I believe the setup instructions for the additional Medicare tax deduction is incorrect. The different rate tables are the Threshold Amounts when an individual files their taxes.

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. This is from the IRS web site.

www.irs.gov/.../Questions-and-Answers-for-the-Additional-Medicare-Tax

Thanks,

Judi

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Jeff Powers 150 on at

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Has Judi's question been answered because I believe she is correct the Additonal Medicare Tax deduction is not set up correctly. The deduction is set up as an employer deduction and it should be an employee deductiion. Also, you are to begin withholding only after the employee's wages exceed the threshold amounts. It is currently set up to withhold each pay period based on an annualized amount.

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Judi Detjen 477 on at

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Jeff,

I had to create a support incident to get this answered. Bug 25156 has been submitted to change the instructions and the tables load so that the additional Medicare tax is an employee deduction and not an employer deduction.

They also replied that a new reading of the instructions seems to indicate that all martial statuses will start withholding at 200,000.

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Jeff Powers 150 on at

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Judi,

Thanks for the reply. Are they also going to fix the deduction so it doesn't start withholding unitl after the employee actually has earnings in excess of the threshold amount?

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