8663 / Are noncash fringe benefits received by an employee subject to the additional Medicare tax?

Yes. The value of any taxable noncash employee fringe benefits is added to an employee’s cash wages to determine whether the taxpayer’s overall wage income exceeds the applicable threshold (see Q 8657). If so, the excess amount will be subject to the additional Medicare tax.¹ Moreover, similar to the payment of only cash wages, if the combined amount of cash wages and taxable noncash fringe benefits exceeds the mandatory wage withholding amount of $200,000 (see Q 8658), the employer must withhold the additional Medicare tax on the excess amount of combined wage income.²