Proposed IRS Regulations and New Q&As on the Additional Medicare Tax

Author: Rena Pirsos, XpertHR Legal Editor

The Internal Revenue Service (IRS) has issued proposed regulations providing employers with guidance on how to implement the 0.9 percent Additional Medicare Tax (AMT) on high income earners that goes into effect January 1, 2013, under the Patient Protection and Affordable Care Act (PPACA). The regulations pertain to the requirements to:

  • Withhold AMT from employee wages;
  • File a return reporting AMT;
  • The employer process for making interest-free adjustments of AMT underpayments and overpayments; and
  • The employer and employee processes for filing a claim for refund of an overpayment of AMT.

The regulations are proposed to apply to calendar quarters beginning after the date final regulations are published in the Federal Register. However, the IRS states that employers may rely on the proposed regulations for tax periods beginning before the date the final regulations take effect.

In addition, in anticipation of employer questions as a result of the proposed regulations, the IRS has added several new payroll related Q&As to the AMT guidance document it issued last summer titled Questions and Answers for the Additional Medicare Tax.

XpertHR has incorporated the proposed regulations in the Payroll chapter of the Employment Law Manual.

Additional Resources

Payroll > Withholding Taxes > FICA Tax Rates

Payroll > Depositing and Reporting Withheld Taxes > Forms Used to Make Adjustments, Corrections, and to Receive Tax Credits and Refunds