Why was Medicare deducted from my ISO exercise?
September 18, 2006
Date: Sat, 08 Apr 2006
On the exercise of ISOs that resulted in W-2 income of $150,000, the Medicare income was over $1 million and Medicare tax was paid on that amount. Why is that?
Date: 01 May 2006
Because someone made a mistake. There is no Medicare income from the exercise of an ISO. Go tell your payroll department to fix it, issue a corrected W-2 and refund the excess Medicare tax.