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Employee Portion Medicare Increases for 2013

As a result of the Patient Protection and Affordable Care Act of 2010 (HR 3590), certain higher wage employees will see an increase in their portion of Medicare tax in 2013. The Health Care and Education Reconciliation Act of 2010 (HR 4872) clarifies the income thresholds that will be subject to this increase, which are outlined below.

  • Wages in excess of $250,000 for taxpayers filing a joint, or a surviving spouse return
  • Wages in excess of $125,000 for taxpayers filling married separately (half of the dollar amount for taxpayers filing joint return)
  • Wages in excess of $200,000 for all other taxpayers

Effective January 1, 2013, employers will be responsible for withholding the additional Medicare tax on employee wages in excess of $200,000 per individual.  Employers will not be responsible for identifying any of the additional wage limit criteria identified above. It is important to note that this change does not include an employer contribution increase; however, it may impact your employees. For that reason, we have included an employee-level communication detailing this change, to be personalized and used at your discretion.

Click here  to view the IRS’ “Frequently Asked Questions” for more details.

Learn more about employment tax solutions from ADP that work with your existing payroll system.


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