Regulatory Advisory

IRS Releases Proposed Rule on Additional Medicare Taxes Under ACA

The Internal Revenue Service has issued a proposed rule implementing higher Medicare taxes for upper-income individuals under the Affordable Care Act. The proposed rule describes how employers should calculate and withhold the tax, adjust for overpayments or underpayments, and how individuals should claim a refund if the tax is overpaid, eliminating a requirement that employees must first seek a refund through their employer. The additional Medicare tax will be required of individuals making $200,000 or married couples making $250,000 for the taxable year beginning Jan. 1, 2013. The proposed rule, attached, has a 90-day comment period.