Guidance released on Medicare Surtax

A recent Journal of Accountancy article explains the recently proposed Internal Revenue Service regulations on the additional Medicare tax. The proposed regulations provide guidance for employers and individuals on implementation of the tax. The tax is effective for wages received in any tax year starting after December 31, 2012. The employer is responsible for withholding the additional tax on any employee’s wages exceeding $200,000 in a calendar year. An employee is liable for additional Medicare tax on wages to the extent that the tax isn’t withheld. The proposed regulations illustrate threshold amounts for self-employed individuals as well as discuss underpayments and the claiming of refunds in limited instances.