Health Care Reform Medicare Surtax 2013


In March 2010, President Obama signed the “Patient Protection and Affordable Care Act” (Pub. L. 111-148), and the “Health Care and Education Reconciliation Act of 2010” (Pub. L. 111-152) (collectively “the Affordable Care Act” or “ACA”).

As a part of the ACA, effective January 1, 2013, employers will be required to withhold an additional 0.9% Medicare Tax on High-Income Taxpayers (the “Medicare Surtax”) on wages and other compensation in excess of $200,000. The increase applies only to the employee portion of the Medicare tax, though the employer is responsible for withholding and reporting. There are penalties to the employer for failure to withhold the tax.

The Medicare Surtax applies only on income greater than $200,000 for individuals with federal tax filing status of single, greater than $250,000 for married individuals filing jointly, and $125,000 for married individuals filing separately. However, employers are required to withhold the Medicare Surtax on amounts in excess of $200,000 for all individuals, with reconciliation of over or under withholding accomplished when the employee files his or her income tax return.

PayData is committed to assisting you with the evolving compliance requirements under the ACA.

PayData is adapting its payroll system to accommodate the Medicare Surtax requirements and additional communications, to be published in the fall of 2012, will provide specific details. No action is required on your part. For additional information access the following document:

For more information about this tax Click Here.