Medicare Hospital Insurance Tax

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Medicare Hospital Insurance Tax


A tax under the Federal Insurance Contributions Act (FICA) that is a United States payroll tax imposed by the federal government on both employees and employers to fund Medicare.

The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2016.

An additional Medicare tax was added by the Affordable Care Act (ACA) – Obamacare.

The rate is 0.9 percent for income above a certain threshold. The tax primary affects high income families. The additional 0.9% tax on the wealthiest people goes to help pay part of the cost of the subsidies mandated by the Affordable Care Act.

The additional 0.9% tax applies to wages in excess of $200,000 ($250,000 for joint returns).

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