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If your earned income climbs high enough, a second Medicare layer kicks in: the 0.9% Additional Medicare Tax. It is not the 2.9% Medicare piece inside self-employment tax on Schedule SE. You figure it on Form 8959, and the deductible half of SE tax on Schedule 1 does not cover it.
This guide covers the tax year 2026 rules for freelancers and other self-employed people — thresholds (they are not inflation-indexed), how W-2 wages and self-employment income stack, worked examples, and what to set aside. Figures come from IRS Topic 560, Form 8959 / Instructions for Form 8959, and Topic 554 for the separate Schedule SE Medicare tax.
In short: How the 0.9% Additional Medicare Tax works for freelancers in 2026: $200k/$250k/$125k thresholds, Form 8959, stacking W-2 wages with SE income, and why it isn’t part of Schedule SE.
What Additional Medicare Tax is
Per IRS Topic 560, a 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement (RRTA) compensation, and self-employment income that exceed a filing-status threshold. The thresholds are statutory and are not indexed for inflation (Form 8959 instructions):
| Filing status | Threshold (2026 — same as prior years) |
|---|---|
| Married filing jointly | $250,000 |
| Married filing separately | $125,000 |
| Single | $200,000 |
| Head of household | $200,000 |
| Qualifying surviving spouse | $200,000 |
Topic 560 summarizes the last three statuses as “all other taxpayers” at $200,000. The tax helps fund Affordable Care Act provisions (including the premium tax credit). There is no employer match for Additional Medicare Tax.
Separate from the 2.9% Medicare on Schedule SE
Self-employment tax (Topic 554 / Schedule SE) is Social Security 12.4% (up to the wage base) plus Medicare 2.9% on net earnings — generally applied to 92.35% of net profit. That 2.9% has no income cap.
Additional Medicare Tax is an extra 0.9% above the thresholds above. It:
- Is not computed on Schedule SE.
- Is computed on Form 8959 and attached to Form 1040 / 1040-SR / 1040-NR / 1040-SS.
- Does not get the “deductible half” treatment. Schedule 1 line 15 (“Deductible part of self-employment tax”) comes from Schedule SE only — see our deductible half of self-employment tax guide.
For the SE-tax math itself, use the self-employment tax calculator and how to calculate self-employment tax. Background: self-employment tax explained.
Try the calculatorSelf-Employment Tax Calculator (2026)Social Security and Medicare on your net profit, using the 2026 wage base of $184,500.OpenHow wages and self-employment income stack
Medicare wages and self-employment income are combined against your filing-status threshold. Topic 560 and the IRS Q&A describe a three-step approach when you have both:
- Figure Additional Medicare Tax on any Medicare wages above the applicable threshold (whether or not tax was withheld).
- Reduce that threshold by total Medicare wages received (but not below zero).
- Figure Additional Medicare Tax on any self-employment income above the reduced threshold.
Do not use a self-employment loss to shrink the tax. RRTA compensation is compared to the threshold separately (not combined with FICA wages or SE income).
On the 2026 Form 8959 draft, Additional Medicare Tax on wages/RRTA and on self-employment income are reported on separate paths: the SE portion generally goes to Schedule 2, line 11; the wages/RRTA portion to Schedule 2, line 17b (Instructions for Form 8959). Confirm the final 2026 form and Schedule 2 line numbers when you file.
Employer withholding vs. what freelancers owe
An employer must withhold the 0.9% Additional Medicare Tax only on Medicare wages (or RRTA compensation) it pays you above $200,000 in a calendar year — regardless of your filing status or a spouse’s income. That withholding starts in the pay period when year-to-date wages cross $200,000 and continues for the rest of the year.
That creates a common freelancer gap:
- Your W-2 job may never hit $200,000, so nothing is withheld for Additional Medicare Tax — even if W-2 + SE income together clear your filing-status threshold.
- Or your employer withholds starting at $200,000 of that job’s wages, but your joint threshold is $250,000 (or you have SE income that still pushes you over).
Form 8959 reconciles liability and withholding. If you expect to owe more than will be withheld, plan estimated payments or extra income-tax withholding on Form W-4 (Publication 505) — you cannot designate estimated payments specifically as “Additional Medicare Tax,” but they apply to your total Form 1040 tax.
Worked examples (2026)
Example A — Single freelancer, SE only. Net self-employment income for Form 8959 purposes: $230,000. No W-2 Medicare wages. Threshold $200,000.
- Amount subject to 0.9%: $230,000 − $200,000 = $30,000
- Additional Medicare Tax: $30,000 × 0.009 = $270
(Separately, you still owe Schedule SE Medicare at 2.9% on net earnings, plus Social Security up to the SSA wage base — see the SE tax guides linked above.)
Example B — Single, wages + SE (IRS-style stacking). Medicare wages $130,000; self-employment income $145,000. Threshold $200,000.
- Wages alone are under $200,000 → no Additional Medicare Tax on wages.
- Reduced SE threshold: $200,000 − $130,000 = $70,000
- SE amount subject to 0.9%: $145,000 − $70,000 = $75,000
- Additional Medicare Tax: $75,000 × 0.009 = $675
Combined earned income is $275,000; the tax hits only the slice above the stacked threshold rules.
Example C — Married filing jointly. Spouse A wages $150,000; Spouse B self-employment income $175,000. Joint threshold $250,000.
- Wages under $250,000 → no Additional Medicare Tax on wages.
- Reduced SE threshold: $250,000 − $150,000 = $100,000
- SE excess: $175,000 − $100,000 = $75,000
- Additional Medicare Tax: $75,000 × 0.009 = $675
Example D — High SE, modest W-2 (withholding miss). Single. Wages $90,000; SE income $160,000. Combined $250,000.
- Employer never withholds Additional Medicare Tax (wages never exceed $200,000).
- Reduced SE threshold: $200,000 − $90,000 = $110,000
- SE excess: $160,000 − $110,000 = $50,000
- Additional Medicare Tax owed on Form 8959: $50,000 × 0.009 = $450 — fund it with estimates or year-end payment.
Cash-flow and set-asides
Once you are near the threshold, treat the 0.9% as its own line item on top of ordinary SE tax and income tax. Our how much to set aside for taxes guide and the 1099 tax calculator help with the broader stack; bump the set-aside when projected wages + SE income will clear your threshold.
Rough check: projected excess over threshold × 0.9%. Revisit mid-year if a big contract or bonus lands.
Quick checklist
- Project Medicare wages (all W-2s) + self-employment income for the year (and spouse’s, if MFJ).
- Compare to your filing-status threshold ($200k / $250k / $125k).
- Apply the three-step stack if you have both wages and SE income.
- File Form 8959 if you owe the tax and/or your employer withheld it.
- Do not expect Schedule 1 line 15 to shelter Additional Medicare Tax.
- If withholding will fall short, raise estimates or Form W-4 withholding.
FAQ
What is the Additional Medicare Tax rate?
0.9% on Medicare wages, RRTA compensation, and self-employment income above your filing-status threshold (IRS Topic 560 / Form 8959).
What are the 2026 thresholds?
They are not inflation-indexed: $250,000 married filing jointly; $125,000 married filing separately; $200,000 for single, head of household, and qualifying surviving spouse.
Is Additional Medicare Tax part of self-employment tax on Schedule SE?
No. Schedule SE covers Social Security and the 2.9% Medicare tax on net earnings. Additional Medicare Tax is figured separately on Form 8959.
Does the deductible half of SE tax apply to Additional Medicare Tax?
No. Schedule 1 line 15 is the deductible part of self-employment tax from Schedule SE. It does not cover the 0.9% Additional Medicare Tax.
How do W-2 wages and freelance income interact?
Medicare wages and self-employment income are combined against your threshold. You tax wages above the threshold first, reduce the threshold by wages (not below zero), then tax SE income above that reduced amount. SE losses do not reduce the tax.
When does an employer withhold Additional Medicare Tax?
On Medicare wages (or RRTA compensation) that employer pays you above $200,000 in a calendar year, without regard to filing status. Freelancers whose W-2 stay under $200,000 may still owe Additional Medicare Tax on Form 8959 if combined income exceeds their threshold.
Which form do I file?
Form 8959, Additional Medicare Tax, attached to Form 1040, 1040-SR, 1040-NR, or 1040-SS when you are liable and/or Additional Medicare Tax was withheld.
Sources
- IRS Topic 560, Additional Medicare tax
- IRS Form 8959, Additional Medicare Tax (2026 draft)
- IRS Instructions for Form 8959 (2026 draft)
- IRS: Questions and answers for the Additional Medicare Tax
- IRS Topic 554, Self-employment tax
- IRS: About Schedule SE (Form 1040), Self-Employment Tax
- IRS Publication 505, Tax Withholding and Estimated Tax
- SSA: Contribution and benefit base ($184,500 for 2026)
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments)