The United States is one of the countries with the most federal, state and local programs at the service of the most unfortunate. But, Have you ever wondered how these aid programs are financed? Well, although it may seem incredible, the answer is closer -and in sight- than you think.
Where can you find it? In your pay stub. Almost all US taxpayers or US residents have a deduction identified by the acronym FED MED/EE. What does MED/EE mean in Spanish? That’s what you’re going to find out right away.
What does MED/EE mean on my paycheck?
Let’s answer the main question of this article: What does MED/EE mean in Spanish? First of all, you should know that these are the acronyms of a deduction used to finance one of the largest health and medical insurance programs in the country: Medicare.
Did you know that… all Americans can access the Medicare health insurance program to enjoy basic health services for free? Although there are parts of Medicare that citizens must pay for on their own, the main part – Medicare Part A – covers services such as hospitalization and emergencies.
How does the FED MED/EE deduction work?
The good part is that the amount deducted to finance Medicare is not taken into account for the federal income tax return on the taxpayer’s income.
Who must pay the FED MED/EE tax?
Everyone! Specifically, all U.S. taxpayers unable to file a qualified exception.
For example, if you live in the United States and are an active member of a religion that does not believe in health insurance or in life-saving treatments and operations, You can go to the IRS to request your exclusion from the FED MED/EE taxpayer registry..
Now, it is important that you know that the list of qualified exemptions is not limited to this cause and that it is not as long as you would like. So much so that the IRS has not added new qualifying grounds in many years.
If you believe you qualify for an exemption, we recommend that you contact the IRS immediately to file the appropriate forms to begin the evaluation process.
If the waiver request is approved, you will receive a communication from the IRS that you must give to your employer so that they eliminate the amount of the withholding.
How much FED MED/EE tax is paid on the paycheck?
The total amount of the FED MED/EE deduction is really low: represents 2.9% of the gross monthly salary. But if the tax is deducted from the paycheck, why does the acronym refer to the employer? Let’s see:
The good part for independent contractors is that they can get out of paying half of the FED MED/EE tax by submitting business expenses.
What other programs are funded by my paycheck?
Really -and to be honest- there are very few federal government programs that are funded through deductions made from taxpayers’ paychecks. Medicare is one of them and it is the most important. The reason?
In addition to being one of the largest health programs, any American who has paid their taxes throughout their working life, will be able to access it for free when you turn 65 years of age.
Can I access Medicare if I asked for an exemption?
Unfortunately not. If you applied for a qualified exemption and it was granted by the IRS, you will not have access to Medicare health insurance when you reach age 65. In this case, you will have to find health insurance on your own.