Municipal Bond Forum

Medicare tax

Q

Does the 3.8% surcharge for investment income, which began Jan. 1, 2013, and will be used to help pay for Obamacare, also apply to tax-free muni bond income?

T.D., Florida

A

James A. Klotz responds:

It is our understanding, based on the opinions of our tax consultants, that tax-free income from municipal bonds will not be subject to the 3.8% unearned income Medicare contribution tax to which you refer.

Jan 4, 2013

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