Handbook / Self-employment tax and 1099s

Additional Medicare Tax for the self-employed in 2026: who owes it

Tax-year note: Tax information on this page applies to the 2026 tax year (returns filed in 2027), from IRS pages checked in November 2026. Figures and dates are labelled with their tax year where they appear. Check current IRS pages before you rely on them.

Self-employment tax includes 2.9% for Medicare on net earnings, with no wage base limit. Higher earners also owe an extra 0.9% on income above a threshold: the Additional Medicare Tax. It went into effect in 2013 and catches some self-employed people by surprise, because unlike with employees, nothing is withheld. This guide covers the 2026 tax year, for returns filed in 2027, based on IRS pages checked in November 2026.

The rate and thresholds

IRS Topic 560 states that a 0.9% Additional Medicare Tax applies to Medicare wages, self-employment income and railroad retirement (RRTA) compensation that exceed these thresholds:

• $250,000 for married filing jointly
• $125,000 for married filing separately
• $200,000 for all other taxpayers

The tax applies only to the amount above the threshold.

Self-employment income only

If all your income is from self-employment, compare your self-employment income subject to Medicare tax with the threshold for your filing status. The 0.9% applies to the excess.

The IRS notes you should not consider a self-employment loss for purposes of this tax. A loss from one business does not reduce wages for this calculation.

Wages and self-employment income together

If you have both a job and a business, IRS Topic 560 describes the calculation:

1. Calculate Additional Medicare Tax on any wages above the threshold for your filing status, regardless of whether tax was withheld.
2. Reduce the threshold by your total Medicare wages, but not below zero.
3. Calculate Additional Medicare Tax on any self-employment income above the reduced threshold.

So wages use up the threshold first, and self-employment income above what remains is taxed at 0.9%.

Married couples

For married couples filing jointly, the threshold applies to combined wages and self-employment income. One spouse may earn below the employer withholding level while the couple together exceeds the joint threshold. Plan for the combined total.

Withholding at work

The IRS says an employer must withhold Additional Medicare Tax from wages paid to an individual in excess of $200,000 in a calendar year, without regard to filing status or wages paid by another employer. There is no employer match for this tax.

You cannot ask your employer to withhold more specifically for Additional Medicare Tax. However, the IRS says you can request additional income tax withholding on Form W-4, which is applied against all taxes on your return, including Additional Medicare Tax.

Reporting it

You figure Additional Medicare Tax on Form 8959 and report it with your Form 1040. Any Additional Medicare Tax withheld by employers is also reported there and credited against your total tax.

Estimated payments

Because nothing is withheld from self-employment income, include Additional Medicare Tax in your estimated tax calculation. IRS Publication 505 covers how to estimate it. If you expect to cross the threshold, add 0.9% of the expected excess to your annual estimate, then spread it across your payments. See Form 1040-ES.

A simple example

A single filer has no wages and expects $230,000 of self-employment income subject to Medicare tax in 2026. The threshold is $200,000, so $30,000 is subject to the extra tax: 0.9% of $30,000 is $270.

If the same person also had $150,000 of wages, the threshold for self-employment income would be reduced to $50,000, and more of the business income would be subject to the 0.9%.

Planning tips

• Watch your combined income during the year, especially in strong years.
• Update estimated payments if a big project pushes you over the threshold.
• Remember the threshold is not the same as the Social Security wage base, which limits only the Social Security part of SE tax.
• Ask a tax professional if you have wages, business income and a spouse's income to combine.

Where it fits with SE tax

Regular self-employment tax is figured on Schedule SE. The Additional Medicare Tax is figured separately on Form 8959. Both count toward the total you need to cover with estimated payments.

Keep records

Keep your wage statements, Schedule SE and Form 8959 together each year.

For 2026, a 0.9% Additional Medicare Tax applies above $200,000 for most filers, $250,000 for joint filers and $125,000 for separate filers; wages use up the threshold first, nothing is withheld from SE income, and you report it on Form 8959.