Form 8959
Forms

Form 8959: Additional Medicare Tax

Form 8959 is used to figure the amount of Additional Medicare Tax owed with any of the six specified returns, which applies to wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above certain threshold amounts. This article explains who must file this form and the amounts subject to the tax.

What is Form 8959?

Form 8959 is an IRS form used to calculate the amount of Additional Medicare Tax due, based on Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that exceed a certain threshold. It is generally required for those who have Medicare wages and tips that are over $200,000, RRTA compensation over $200,000, total Medicare wages plus self-employment income that exceed the threshold, or total RRTA compensation plus tips over the threshold. The form is used to adjust an Additional Medicare Tax liability, if any, and must be attached to certain tax returns.

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IRS Form 8959 – Who Needs to Fill It Out?

Form 8959 needs to be filled out if a taxpayers’ Medicare wages/tips (Form W-2, box 5) or Railroad Retirement Tax Act compensation (Form W-2, box 14) on any single form exceeds $200,000 or if their total Medicare wages/tips and self-employment income (including that of a spouse, if married filing jointly) exceed the threshold for their filing status. Employers are also required to withhold Additional Medicare Tax on wages/compensation paid in excess of $200,000 in a calendar year. Form 8959 should be attached to your return and, if applicable, a corrected Form 8959 should be attached to an original/amended return if liability for Additional Medicare Tax needs adjustment.

Step-by-Step: Form 8959 Instructions For Filling Out the Document

Form 8959 must be filed if the taxpayer has greater than $200,000 in wages, RRTA compensation, or self-employment income. The threshold amount for Additional Medicare Tax is determined by the filing status with married filing jointly at $250,000. Employers are responsible for withholding the 0.9% Additional Medicare Tax on Medicare wages or RRTA compensation when it exceeds $200,000 in a calendar year. The taxpayer may need to make estimated tax payments to cover any wages or self-employment income exceeding the threshold and not covered with Additional Medicare Tax withholding if the liability is greater than $1,000 after subtracting withholding and refundable credits. For more information, please see the IRS website and Pub. 505.

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Below, we present a table that will help you understand how to fill out Form 8959.

Form 8959 Instructions
Form 8959 must be filed if the taxpayer has greater than $200,000 in wages, RRTA compensation, or self-employment income.
  • Understand the threshold amounts for Additional Medicare Tax based on filing status.
  • Be aware of the responsibility of employers to withhold Additional Medicare Tax when wages or compensation exceed the threshold.
  • Consider making estimated tax payments if your liability exceeds $1,000 after subtracting withholding and refundable credits.
  • Refer to the IRS website and Pub. 505 for additional information.
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Do You Need to File Form 8959 Each Year?

Do You Need To File Form 8959 Each Year? Yes. You must file Form 8959 if one or more of the following applies to you: your Medicare wages and tips on any single Form W-2 (box 5) are greater than $200,000, your RRTA compensation on any single Form W-2 (box 14) is greater than $200,000, your total Medicare wages and tips plus your self-employment income, if any, are greater than the threshold amount for your filing status, or your total RRTA compensation and tips (Form W-2, box 14) are greater than the threshold amount for your filing status. If you’re liable for Additional Medicare Tax, you must file Form 8959, even if you’re not required to file an income tax return. You can claim a credit against the total tax liability shown on your tax return by filing Form 8959.

Download the official IRS Form 8959 PDF

On the official IRS website, you will find a link to download Form 8959. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 8959

Sources:

https://www.irs.gov/forms-pubs/about-form-8959

https://www.irs.gov/instructions/i8959

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