Instructions For Form 8959 - Additional Medicare Tax

Part I—Additional

amount meets any of the following

retirement (RRTA) compensation. Enter the

conditions.

result on this line and go to Part IV.

Medicare Tax on Medicare

1. The amount on Schedule SE,

Wages

Part IV—Total Additional

Section A, line 4, is less than $400.

Medicare Tax

If you (and your spouse if filing a joint return)

2. The amount on Schedule SE,

did not have Medicare wages, skip Part I and

Section B, line 6, is less than $400 and the

Line 18

go to Part II.

amount on line 5b is -0- or blank. However,

if line 5b is $100 or more, include that

Line 1

Include the amount from line 18 on the

amount on line 8.

following line of your tax return.

Enter the total of your Medicare wages and

Line 62 of Form 1040.

3. The amount on Form 1040-SS or

tips from box 5 of your Form W-2. If you have

Form 1040-PR, Part V, line 6, is less than

Line 60 of Form 1040NR.

more than one Form W-2, enter the total of

$400 and the amount on line 5b is -0- or

Line 5 in Part I of Form 1040-SS.

the amounts from box 5. If you are filing a

blank. However, if line 5b is $100 or more,

Line 5 in Part I of Form 1040-PR.

joint return, also include your spouse’s

include that amount on line 8.

wages and tips.

Part V—Withholding

Line 13

Line 2

Reconciliation

Multiply line 12 by 0.9% (.009). This is your

Enter unreported tips from line 6 of Form

Use Part V to figure the amount of Additional

Additional Medicare Tax on self-employment

4137, Social Security and Medicare Tax on

Medicare Tax on wages and railroad

income. Enter the result on this line and go to

Unreported Tip Income. If you are filing a

retirement (RRTA) compensation withheld

Part III.

joint return, also include the amount from

by your employer.

line 6 of your spouse's Form 4137.

Example. Kathleen and Liam are

married and file a joint return. Kathleen has

If you (and your spouse if filing a joint

Penalty for not reporting tips. If you did

$130,000 in wages (included on line 4 of

return) did not have Medicare wages or

not report tips to your employer as required,

Form 8959). Liam has $140,000 in

railroad retirement (RRTA) compensation,

you may be charged a penalty equal to 50%

self-employment income (included on line 8

leave Part V blank.

of the social security, Medicare, and

of Form 8959). The $130,000 of Kathleen’s

Additional Medicare taxes due on those tips.

Line 19

wages reduces Liam’s self-employment

You can avoid this penalty if you can show

income threshold to $120,000 ($250,000

Enter the amount of Medicare tax withheld, if

that your failure to report tips to your

threshold minus the $130,000 of wages, as

any, which is reported on Form W-2, box 6. If

employer was due to reasonable cause and

figured on lines 9 through 11 of Form 8959).

you have more than one Form W-2, add the

not due to willful neglect. To do so, you can

Kathleen and Liam are liable to pay

amounts in box 6 of all your Forms W-2 and

attach a statement to your return explaining

Additional Medicare Tax on $20,000 of

enter the total here. If you are filing a joint

why you did not report them or submit a

Liam’s self-employment income ($140,000 in

return, also include your spouse’s Medicare

statement in response to a notice regarding

self-employment income minus the reduced

tax withheld.

a proposed penalty assessment. For more

threshold amount of $120,000, as figured on

information about tip reporting, see Pub. 531,

line 12 of Form 8959). Kathleen and Liam

Also include any Uncollected Medicare

Reporting Tip Income.

owe Additional Medicare Tax of $180.00

tax on tips from Form W-2, box 12, code B,

Line 3

($20,000 x .009, as figured on line 13 of

and any Uncollected Medicare tax on the

Form 8959). Kathleen and Liam must file

taxable cost of group-term life insurance over

Enter wages from line 6 of Form 8919,

Form 8959.

$50,000 (for former employees) from Form

Uncollected Social Security and Medicare

W-2, box 12, code N. If you have more than

Tax on Wages. If you are filing a joint return,

Part III—Additional

one Form W-2, add the amounts in box 12,

also include the amount from line 6 of your

Medicare Tax on Railroad

codes B and N, of all your Forms W-2 and

spouse's Form 8919.

enter the total here. If you are filing a joint

Retirement Tax Act (RRTA)

Line 7

return, also include these amounts, if any,

Compensation

from your spouse's Form(s) W-2. However,

Multiply line 6 by 0.9% (.009). This is your

do not include any amounts reported on

Additional Medicare Tax on your wages.

If you (and your spouse if filing a joint return)

Form W-2, box 12, codes B and N for

Enter the result on this line and go to Part II.

did not have railroad retirement (RRTA)

uncollected RRTA Medicare tax.

compensation, skip Part III and go to Part IV.

Part II—Additional

Line 14

Note. Both Medicare tax and Additional

Medicare Tax on

Medicare Tax withholding are reported

Enter the total of your railroad retirement

Self-Employment Income

together on Form W-2, box 6.

(RRTA) compensation and tips. The amount

Line 23

If you (and your spouse if filing a joint return)

of RRTA compensation for a railroad

did not have self-employment income, skip

employee is reported on Form W-2, box 14.

Enter the amount of Additional Medicare Tax

Part II and go to Part III.

If you have more than one Form W-2, enter

withheld, if any, which is reported on Form

the total of the RRTA compensation amounts

Line 8

W-2, box 14. If you have more than one

from box 14 of all Forms W-2. If you are filing

Form W-2, add the amounts in box 14 of all

a joint return, also include your spouse’s

Form 1040 and 1040NR filers. Enter your

your Forms W-2 and enter the total here. If

RRTA compensation. An employee

self-employment income from Schedule SE,

you are filing a joint return, also include your

representative subject to RRTA taxes should

Section A, line 4 or Section B, line 6.

spouse’s Additional Medicare Tax withheld.

include the total compensation subject to

Combine amounts from these lines if you

An employee representative subject to

Tier 1 Medicare tax as reported on line 2 of

have entries on both Section A, line 4 and

RRTA taxes should include the total

Form CT-2 (include the total of the

Section B, line 6, or if you have multiple

Additional Medicare Tax paid as reported on

compensation amounts from line 2 of all

Schedules SE.

line 3 of Form CT-2 (include the total

Forms CT-2 filed for 2014).

Additional Medicare Tax paid from line 3 of

Form 1040-SS and 1040-PR filers. Enter

Line 17

all Forms CT-2 filed for 2014).

the self-employment income from Part V,

line 6.

Line 24

Multiply line 16 by 0.9% (.009). This is your

Additional Medicare Tax on railroad

Self-employment income less than $400.

Include the amount from line 24 on the

Do not include an amount on line 8 if the

following line of your tax return.

Instructions for Form 8959 (2014)

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Instructions For Form 8959 - Additional Medicare Tax - 2014 Page 3

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