FICA Changes for 2013

New Medicare Tax for Affordable Care Act (aka "ObamaCare"). Starting in 2013, employers will need to withhold an additional 0.9% for Medicare tax for wages that exceed $200,000 regardless of the employee's filing status (married or single). The additional tax will be included with normal Medicare taxes on the W-2 for 2013 so no new boxes will be required to report this additional Medicare Tax amount on the W-2, the total for ALL Medicare Tax will be reported in Box 6. According to the IRS, the 941 Tax Return for 2013 will be changed to incorporate a new line to report these Medicare Wages that exceed the $200,000 threshold so that the additional Medicare Tax can be reported.

IMPORTANT:  This additional Medicare tax is withheld from the employee's payroll check, however there is NO MATCH required by the employer as there is for normal Medicare taxes.  The 2012 year-end AccuBuild update will contain new changes to automatically compute this new additional Medicare tax when an employee's year-to-date Taxable Medicare Wages exceed the $200,000 limit.

Due to the new Medicare Additional Tax, the following reports have been updated and/or converted from the traditional format to MAR in order to reflect the new fields for the 'subject wages' and new tax. The new tax amount will be stored in the TaxAmount5 field in the prchecks.adt table.

•PRREP17A.644 - Federal Tax Liability Report

•PRREP14A.644 - Subject to Earnings Report - Summary with Drill Down - Trans Date

•PRREP14A.645 - Subject to Earnings Report - Summary with Drill Down - W/E Date

•PRREP14B.644 - Subject to Earnings Report - Full Detail - Trans Date

•PRREP14B.645 - Subject to Earnings Report - Full Detail - W/E Date

In addition to the new tax fields, the Subject to Earnings reports also include the employer burden amounts for FICA which is not displayed in the traditional version of this report.