FAQ 951: Budget: Additional Medicare Tax of 0.9% rate under Affordable Care Act

Problem: Is the Budget Self Employed calculation updated to make adjustments for the .9% additional medicare tax as added by the Affordable Care Act?

Solution: No change to the software is needed for this calculation as it only affects the individual's taxes and does not affect the Self-Employment tax since this tax is not matched by the Employer. Note in IRS FAQs http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax that this additional tax is not matched and therefore does not get deducted from the Owner's compensation since it is not subject to 164(f) deduction. 34. Is there an "employer match" for Additional Medicare Tax (as there is with the regular Medicare tax)? No. There is no employer match for Additional Medicare Tax.