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We have 2 employees who will exceed the threshold for the new Medicare .9% tax that went into effect 01/01/2013. Upon reviewing the way the tax tables were created, it appears they are set up based on individual liability levels (so 3 levels are set up in our system - $200,000 for Single filing, $250,000 for Married Filing Jointly and $125,000 for Married Filing Sep) rather than the employer requirements as stated below from the IRS website:
(See Publication 505, Tax Withholding and Estimated Tax, for more information)
11. Will Additional Medicare Tax be withheld from an individual's wages?
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. An individual may owe more than the amount withheld by the employer, depending on the individual’s filing status, wages, compensation, and self-employment income. In that case, the individual should make estimated tax payments and/or request additional income tax withholding using Form W-4, Employee's Withholding Allowance Certificate.
I was surprised this does not appear to have been addressed previously in this forum. Is this something Microsoft is addressing in future releases? I can obviously change the tables manually, but I would rather not.
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Amber,
Dynamics SL has put forward the explanation you noted above after appraising the situation from CCH and govt web sites. I know of no changes coming at this time for the fed9, Additional Medicare tax deduction.
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