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?
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.
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