Fed MED/EE stands for Federal Medicare/Employer-Employee, which is a tax that funds the Medicare Health Insurance program. Every American taxpayer is required to pay the Medicare tax unless they offer a qualified exception.
Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes, also known as social security taxes, and the hospital insurance tax, also known as Medicare taxes. Different rates apply for these taxes.– IRS.GOV
On your pay statement, Medicare is shown as Fed MED/EE to designate the employee’s amount of Medicare tax that was withheld. Employer’s also pay Medicare withholding on your behalf, which does not come out of your pay. Social Security taxes are referred to as OASDI (Old Age Survivor and Disability Insurance) and are shown on your pay statement as Fed OASDI/EE for the employee’s withholding amount. For withholding rates, see the “Read more” section below.
Medicare should not be confused w/ the Affordable Care Act (ACA) or Medicaid. Medicare is health insurance for people 65 or older. You’re first eligible to sign up for Medicare 3 months before you turn 65. You may be eligible to get Medicare earlier if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease). For additional information please go to https://www.medicare.gov/basics/get-started-with-medicare.
Old Age and Survivors Disability Insurance (OASDI, aka Social Security) and Medicare Taxes
There are several reasons Social Security and Medicare tax may not have
been withheld from your paycheck:
- You are a degree-seeking student in good standing, attending school at
least 1/2 time and you are working less than an average of 30 hours per
week. More details can be found on the Student FICA Exemption section below.
- You are a foreign national student on an F-1 or J-1 visa, you are in non-resident alien tax status, and you are in your first five years in the United States.
- You are a foreign national on a J-1 visa and you are in your first two years in the United States.
- You have reached the OASDI wage cap which increases every year. In 2021 the OASDI wage cap is $142,800.00. In 2022 it will increase to $147,000. While OASDI wages are capped, Medicare wages are not capped. In fact, the Affordable Care Act (ACA) passed in 2013 added an additional 0.9% tax for Medicare wages exceeding $200,000.00, increasing the tax rate from 1.45% to 2.35%.
Student FICA Exemption
The IRS provides a special exemption for students who work on campus commonly known as the Student Exemption to FICA tax, which states that FICA (Social Security & Medicare) taxes do not apply to services performed by students employed by a school, college, or university where the student is pursuing a course of study.
North Carolina State University has interpreted this regulation to mean that a student must work:
- Less than 30 hours per week, and
- Be enrolled at least half time:
- Six hours for undergraduate students and three hours for graduate students during the fall and spring semesters
- Three hours for undergraduates and one hour for graduate students during the summer semester.
If students do not meet both of these criteria, Social Security and Medicare taxes will be withheld.