MEDICARE ISSUES Provision Impact Effective Date Unearned Income Medicare Contribution. A Medicare tax is imposed on high income individuals equal to 3.8% of the lesser of an individual’s (1) “net investment income” (capital gains, interest, dividends, annuities, rent and gross income from passive activities); or, (2) modified adjusted gross income in excess of $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes. Individuals with net investment income and modified AGI of $250,000 (married filing jointly), $200,000 (single), or $125,000 (married filing separately) 1/1/13 Related CBIZ Health Reform Bulletin 2013 Additional Medicare Tax Clarifications and Proposed Regulations Issues (12/10/12) 2013 Final Net Investment Income, Additional Medicare Tax Regulations (12/11/13) The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice.

You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service. © Copyright 2014 – CBIZ, Inc.

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