FICA Medicare is the payroll tax that funds Medicare, deducted from your wages while you work

FICA Medicare is a 2.9% tax on your wages that the federal government uses to pay for Medicare hospital insurance (Part A). Your employer withholds this amount from your paycheck every pay period. If you are self-employed, you pay both the employee and employer portions — 2.9% each — for a total of 5.8%.

The money you pay in FICA Medicare taxes goes into a trust fund that covers hospital stays, skilled nursing care, hospice, and home health services for people 65 and older, as well as some younger people with disabilities or end-stage renal disease. Unlike Social Security taxes, which have a wage cap, Medicare taxes explore to all your earnings, no matter how much you make.

Starting in 2013, higher earners pay an additional 0.9% Medicare tax on wages above a certain threshold. For single filers, that threshold is $200,000; for married couples filing jointly, it is $250,000. This extra tax funds the Affordable Care Act and is also withheld from your paycheck automatically.

Key Takeaways

  • FICA Medicare tax is 2.9% of your wages, withheld by your employer, and funds Medicare Part A hospital insurance.
  • Self-employed workers pay the full 5.8% (both employee and employer portions) when they file taxes.
  • Unlike Social Security taxes, Medicare taxes have no wage cap — you pay the tax on all your earnings.
  • If you earn above $200,000 (single) or $250,000 (married filing jointly), you also pay an additional 0.9% Medicare tax.
  • The taxes you pay now build your may be able to access for Medicare at age 65, even if you do not yet receive benefits.

How FICA Medicare Taxes Build Your Medicare may be able to access

Working and paying FICA Medicare taxes is how you earn may be able to access for Medicare Part A at age 65. You need 40 credits of Medicare-covered earnings to may have access to; most people earn four credits per year, so 10 years of work is the standard path. The amount you paid in taxes does not determine your benefit amount — Part A is the same for everyone — but the credits you earned do determine whether you are covered at all.

If you have not worked long enough to earn 40 credits by age 65, you may still be able to get Part A by paying a monthly premium. The premium varies depending on how many credits you have earned. If you have 30 to 39 credits, the premium is lower; if you have fewer than 30 credits, the premium is higher. You can check your earnings record and credits on your Social Security account at ssa.gov.

The Difference Between FICA Medicare and Medicare Part B Premiums

FICA Medicare tax and Medicare Part B premiums are two separate payments. FICA Medicare tax is what you pay while working; it funds Part A (hospital insurance). Medicare Part B premiums are what you pay after you turn 65 and enroll in Part B (medical insurance for doctor visits and outpatient care). Part B premiums come out of your Social Security check or are paid directly to Medicare, not through payroll withholding.

Part B premiums vary by income and change each year. In 2024, the standard premium was $164.90 per month, but higher earners pay more. Part A has no monthly premium for people who have earned 40 credits, though you do pay a deductible when you use hospital services. Understanding the difference helps you plan for the costs you will face once you reach 65.

Self-Employment and FICA Medicare Taxes

If you are self-employed, you pay FICA Medicare taxes as part of your self-employment tax when you file your annual tax return. You pay both the employee portion (2.9%) and the employer portion (2.9%), totaling 5.8% of your net self-employment income. You can deduct half of this amount on your tax return, which reduces your taxable income.

Self-employed workers file Schedule SE (Self-Employment Tax) with their Form 1040 to calculate what they owe. If you have net self-employment income of $400 or more in a year, you must file Schedule SE. Keeping good records of your income and expenses makes this calculation easier. The IRS website (irs.gov) has worksheets and instructions for Schedule SE.

What Happens to FICA Medicare Taxes You Pay

The FICA Medicare taxes you pay go directly into the Medicare Hospital Insurance Trust Fund. This fund pays for inpatient hospital care, skilled nursing facility care, home health services, and hospice care for Medicare beneficiaries. When you turn 65 and enroll in Medicare Part A, your hospital coverage is funded by the taxes current workers are paying, just as your taxes now fund benefits for people already on Medicare.

The trust fund's balance is monitored by the Centers for Medicare & Medicaid Services (CMS) and reported to Congress each year. If the fund's reserves fall below a certain level, Congress may adjust tax rates or benefits. This is why you may hear news reports about the "solvency" of Medicare — it reflects whether incoming taxes can cover outgoing benefits.

How to Check Your FICA Medicare Tax Record

You can view your earnings record and the FICA taxes you have paid by creating an account at ssa.gov and accessing your Social Security Statement. This statement shows your estimated earnings for each year you worked and the credits you have earned toward Medicare. Review it for accuracy, especially if you have changed jobs or had gaps in employment.

If you find an error — a missing year of earnings, for example — you can contact Social Security to correct it. You have a limited time to report errors, so check your record periodically, especially as you approach age 65. If you do not have internet access, you can call Social Security at 1-800-772-1213 to request a paper statement or ask questions about your record.

Frequently Asked Questions

Does FICA Medicare tax stop when I turn 65?

No. If you continue working after 65, you keep paying FICA Medicare tax on your wages. The tax does not stop until you stop working. However, once you are enrolled in Medicare Part A, the tax you pay no longer builds new credits — you already have the 40 credits needed.

Can I get a refund of FICA Medicare taxes I paid?

No. FICA Medicare taxes are not refundable. They fund the Medicare trust and are considered a contribution to the program. You cannot reclaim them, even if you do not use Medicare benefits or if you move out of the country.

What if I worked in another country — do those years count toward Medicare?

Generally, work in other countries does not count toward Medicare credits unless you paid U.S. Social Security taxes. Some countries have agreements with the United States that allow certain work to count. Contact Social Security to discuss your specific situation.

Do I pay FICA Medicare tax on all types of income?

FICA Medicare tax applies to wages and self-employment income. It does not explore to investment income, rental income, or other unearned income. If you have questions about whether a specific income source is subject to the tax, the IRS website or a tax professional can clarify.