The .9% Medicare Surtax – has applied since 2013 under the Affordable Care Act (ACA) – The income thresholds below are the same in 2026 as they were in 2013. While income thresholds have not changed, more households are now affected.
Employees pay the standard 1.45% Medicare tax on wages, matched by employers with no income limit. The Medicare Surtax is an additional 0.9% tax on all earned income, including wages, compensation, self-employment income, and Railroad Retirement Compensation when Modified Adjusted Gross Income (MAGI) exceeds thresholds:
Married filing separately – $125,000
MFJ – $250,000
Single/Head of Household – $200,000
Example: a married couple filing jointly with $400,000 MAGI will owe an additional $1,350 tax. $400,000 – $250,000 = $150,000 x .009 = $1,350.
Employers must withhold the 0.9% Medicare Surtax once employee wages exceed $200,000. Failure to comply can result in IRS penalties.
Self-employed taxpayers are required to pay Medicare tax of 2.90% plus the Surtax of 0.9% when applicable.
The Net Investment Income Tax (NIIT) – is a separate tax of 3.8% applied to unearned income such as capital gains, dividends, interest, and rental income when MAGI exceeds the limits above. If the same married couple also earns passive income of $100,000 in 2026, they will owe an additional $3,800.
Killingsworth Spencer in Roswell, GA, is dedicated to helping taxpayers in Fulton and Cobb Counties determine the best options for their particular circumstances. For more information on any tax matter or to schedule an appointment, please call us at 770-552-8286. Visit us at www.killingsworthspencerllc.com
For additional information about the Medicare Surtax, please visit – https://www.irs.gov/taxtopics/tc560.
Disclaimer: This post is for general information only and should not be taken as legal or financial advice.