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Affordable Care Act - Individuals

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  4. Are wages that are not paid in cash, such as fringe benefits, subject to Additional Medicare Tax?

Are wages that are not paid in cash, such as fringe benefits, subject to Additional Medicare Tax?

Yes, the value of taxable wages not paid in cash, such as noncash fringe benefits, are subject to Additional Medicare Tax, if, in combination with other wages, they exceed the individual’s applicable threshold. Noncash wages are subject to Additional Medicare Tax withholding, if, in combination with other wages paid by the employer, they exceed the $200,000 withholding threshold.

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