A bill to amend the Internal Revenue Code of 1986 to apply inflation adjustments to the additional hospital insurance tax on high income taxpayers.
Sponsored By: Senator Kennedy, John [R-LA]
Introduced
Summary
Indexes the income cutoffs that trigger the additional hospital insurance tax to inflation. The bill would apply the federal cost-of-living adjustment (COLA) to the dollar amounts that determine who pays the additional hospital insurance tax and to parallel amounts in self-employment tax rules, and it would round adjusted amounts up to the next $1,000.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Higher Medicare payroll thresholds for workers
This bill would index the wage amounts that trigger the additional hospital insurance (Medicare) payroll tax for employees. For calendar years beginning after 2026, each dollar amount in the listed wage rules would be increased by that dollar amount times the cost-of-living adjustment under section 1(f)(3), using calendar year 2025 instead of 2016 when computing the COLA base. Any adjusted amount that is not a multiple of $1,000 would be rounded up to the next $1,000. If enacted, employees with wages near the current thresholds would be less likely to pay the extra Medicare tax, and employers who withhold payroll taxes would use the higher thresholds.
Higher Medicare thresholds for self-employed
This bill would index the dollar amounts that trigger the additional hospital insurance portion of self-employment tax. For taxable years beginning after 2026, each specified dollar amount would be increased by that base amount times the cost-of-living adjustment under section 1(f)(3), using calendar year 2025 instead of 2016 when computing the COLA base. Any adjusted amount that is not a multiple of $1,000 would be rounded up to the next $1,000. If enacted, self-employed taxpayers with net earnings near the current thresholds would be less likely to pay the extra Medicare self-employment tax.
Sponsors & CoSponsors
Sponsor
Kennedy, John [R-LA]
LA • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov