By Brian Sanders, Director of Payroll
An added Medicare tax on wages in excess of $200,000 a year will take effect starting January 1, 2013 as part of the Patient Protection and Affordable Care Act. There will be two tiers of withholding rates of Medicare tax in 2013. Wages up to $200,000 will be taxed at 1.45 percent while amounts greater than $200,000 will be taxed at 2.35 percent. There is no cap on the amount of Medicare tax.
Faculty and staff with FICA wages under $200,000 a year will not be affected by this increase in Medicare tax; the withholding rate will remain at 1.45 percent.
Employers are not affected by this increase in Medicare tax. The added tax applies to the employee share of Medicare tax. Employers will continue to pay 1.45 percent on all wages subject to Medicare tax.
This entry was posted on Tuesday, November 13th, 2012 at 8:20 am and is filed under 2012 - 4th Quarter.