Congress Eliminates the 3% Tax on Many Medicare Payments

On Wednesday, the US House passed an amended version of HR 674, legislation that repeals a planned 3 percent tax-withhold for many Medicare payments. It now goes to President Obama, who is expected to sign the bill.

Originally passed in 2006 and delayed several times, the statute called for all federal, state and local government payments to those providing services or goods to have 3 percent of their payment withheld until the following tax year in an effort to increase tax compliance. However, the American Medical Association led efforts to amend the measure as the original statute was considered overly broad and would have applied even to Medicare payments made to physicians.


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