What percentage is assessed for the Additional Medicare Tax on income over the threshold?

The Additional Medicare Tax is levied on high-income earners to fund Medicare. It applies to wages, self-employment income, and certain other types of income that exceed specified income thresholds. For individual taxpayers, the threshold is $200,000, and for married couples filing jointly, it is $250,000.

The tax rate for the Additional Medicare Tax is set at 0.9%. This rate is applied to income above these thresholds, making it an essential consideration for those who anticipate exceeding these income levels. As the Additional Medicare Tax is intended to affect high-income earners specifically, the determination of the tax begins at the thresholds.

It's critical to grasp that the Additional Medicare Tax is an additional tax, meaning it is not a new tax for all income, but rather an increase on income exceeding the designated thresholds. Understanding this context helps to clarify the importance of the correct percentage.