Inflation for Hospital Insurance Tax

Full Title:
A bill to amend the Internal Revenue Code of 1986 to apply inflation adjustments to the additional hospital insurance tax on high income taxpayers.

Summary#

This bill changes parts of the Internal Revenue Code so that the dollar thresholds for the additional hospital insurance (HI) tax on high-income taxpayers are adjusted each year for inflation. It adds new subsections to section 3101 (employment taxes) and section 1401 (self-employment taxes). The adjustments start for calendar years and taxable years beginning after 2026. The cost-of-living adjustment uses the formula in section 1(f)(3) but substitutes the year 2025 for 2016. If an adjusted amount is not a multiple of $1,000, the bill requires rounding up to the next $1,000.

What it means for you#

  • The bill applies to the additional hospital insurance tax that affects certain high-income wage and self-employment earnings.
  • Starting after 2026, the dollar thresholds used to determine who pays that extra HI tax will increase each year for inflation under the bill’s formula.
  • If you are not subject to the additional HI tax now, the bill’s text does not change other taxes or rates in the provided material.

Expenses#

No publicly available information about budgetary costs, revenue changes, or estimates is included in the bill text provided.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.