By Russell Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Ask Rusty – My Friend is 65; shouldn’t she be exempt from Medicare payroll taxes?
Dear Rusty: My girlfriend is 65 and she just enrolled in Medicare. She is still working full time as a nurse, but they are still deducting Medicare taxes from her paycheck. I thought as soon as you started Medicare, that they would no longer take any Medicare taxes from her paychecks. Is that not correct? Signed: Concerned Friend
Dear Concerned Friend: Your understanding about Medicare payroll tax is, indeed, not correct. Medicare taxes are levied on everyone who works and earns, regardless of whether or not they are currently enrolled in the Medicare program. That is how Medicare has worked since it was first enacted in the mid-1960s and how it still works today.
FYI, everyone who works for an employer must pay “FICA” (Federal Insurance Contributions Act) payroll tax of 7.65%. Most (6.2%) of that payroll tax goes to support Social Security, but 1.45% goes to support Medicare Part A. Self-employed individuals must also pay this tax under the Self-Employed Contributions Act (SECA) which is equivalent to FICA, except the self-employed individual must also pay the employer portion of the payroll tax. The Social Security portion of the FICA/SECA tax has an earnings cap ($184,500 in 2026), but there is no cap on earnings for the Medicare portion of the FICA/SECA payroll tax. FYI, employers pay an equivalent amount of Social Security and Medicare taxes, and the Medicare portion of the payroll tax is paid on all earnings (there is no cap on earnings from which the Medicare payroll tax is withheld).
To ensure understanding, Medicare Part A provides healthcare coverage for inpatient hospitalization services, and Medicare Part B provides coverage for outpatient medical services (doctors, medical tests, etc.). That 1.45% of the FICA (and SECA tax for the self-employed) is paid by those who work to help fund the Medicare Part A program, which is premium-free for most Americans after age 65. For Medicare Part B, there is a separate premium which helps pay for Medicare outpatient healthcare services. The standard Medicare Part B premium for 2026 is $202.90 per month, compared to Medicare Part A which is free to all who are eligible for Social Security benefits. But the 1.45% payroll tax which is being withheld from your girlfriend’s paycheck is paid by everyone who has work earnings, even if they are enrolled in Medicare.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.
