True or False: The employer portion on additional Medicare tax (wages over $200,000) is 0.9%
A. False
B. True
Answer (2)
The additional Medicare tax of 0.9% applies only to the employee's wages exceeding $200,000.
The employer is not responsible for paying the additional 0.9% Medicare tax.
The employer's responsibility is only the regular Medicare tax of 1.45% of all wages.
Therefore, the statement is F a l se .
Explanation
Understanding the Question The question asks whether the employer portion of additional Medicare tax for wages exceeding $200,000 is 0.9%. To answer this, we need to understand the regulations regarding the additional Medicare tax.
Explanation of Medicare Tax The additional Medicare tax of 0.9% is only applied to the employee's wages exceeding $200,000 (single filers). The employer does not have to pay this additional tax. The employer is only responsible for the regular Medicare tax, which is 1.45% of all wages.
Determining the Answer Since the employer does not have to pay the additional 0.9% Medicare tax on wages exceeding $200,000, the statement is false.
Final Answer The employer portion on additional Medicare tax (wages over $200,000) is False.
Examples
Imagine you are running a small business. Understanding payroll taxes is crucial. The regular Medicare tax is something you, as the employer, always contribute (1.45% of all wages). However, the additional Medicare tax only applies to your employees' wages exceeding a certain threshold ($200,000 for single filers). As an employer, you don't match this additional tax; it's solely the employee's responsibility. This knowledge helps you accurately calculate and manage your payroll expenses.
The employer portion on additional Medicare tax for wages exceeding $200,000 is not 0.9%; this tax is solely borne by the employee. Employers only pay the regular Medicare tax of 1.45% on all wages. As such, the correct answer is A. False.
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