Who is responsible for paying Medicare tax?

Who is responsible for paying Medicare tax?

• A. Only the employer
• B. Only the employee
• C. Employer and employee
• D. Self-employed individuals only

Answer: (C)

The correct choice indicates that both the employer and the employee share the responsibility for paying Medicare tax. In the United States, Medicare tax is part of the Federal Insurance Contributions Act (FICA), which funds Medicare, the federal health insurance program for individuals aged 65 and older, as well as some younger people with disabilities. Employers are required to withhold Medicare taxes from their employees' wages. At the same time, employers also match this amount, contributing an equal portion to the Medicare tax. This system is designed to ensure that funding for Medicare is collected fairly from both workers and their employers. Self-employed individuals are also subject to Medicare tax, but in their case, they pay both the employee and employer portions on their net earnings, effectively making them responsible for the total contribution. Hence, while it's true that self-employed individuals contribute to Medicare tax, the broader context of shared responsibility between employers and employees remains the primary focus of this question.

The correct choice indicates that both the employer and the employee share the responsibility for paying Medicare tax. In the United States, Medicare tax is part of the Federal Insurance Contributions Act (FICA), which funds Medicare, the federal health insurance program for individuals aged 65 and older, as well as some younger people with disabilities.

Employers are required to withhold Medicare taxes from their employees' wages. At the same time, employers also match this amount, contributing an equal portion to the Medicare tax. This system is designed to ensure that funding for Medicare is collected fairly from both workers and their employers.

Self-employed individuals are also subject to Medicare tax, but in their case, they pay both the employee and employer portions on their net earnings, effectively making them responsible for the total contribution. Hence, while it's true that self-employed individuals contribute to Medicare tax, the broader context of shared responsibility between employers and employees remains the primary focus of this question.