Why does my payroll company separate medicare and addition medicare for EE? I balance for the quarter but need a better understanding? Can you assist me?
The reason why your company separates the regular Medicare which is 1.45% from the additional medicare rate of 0.9% is because the additional Medicare does not kick in until you hit a certain income amount. So throughout the year most folks are paying the regular medicare tax rate of 1.45% and then once they hit a certain income threshold, the calculation of the additional medicare rate of 0.9% kicks in. It’s probably easier to keep the calculations separate when calculating paychecks and I believe the additional tax has to be reported on a separate line on IRS Form 941. You can check out instructions on how to complete this form by clicking the link below: https://fitsmallbusiness.com/fica-and-form-941/
Thanks so much for reading!
315 Madison Avenue, 24th Floor
New York, NY 10017
Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to see our full disclaimer.
Product or company names, logos, and trademarks referred to on this site belong to their respective owners.