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For example, younger persons who are still working probably arenât on Medicare and are still paying into the system by a rate of 6.2% of their annual earnings. Elderly persons on Medicare can use the IRS tax deduction to reduce their tax burden by claiming costs associated with Medicare payments.
1 Canada Pension Plan (CPP) contributions deducted from your pay. 2  Employment Insurance (EI) premium deducted from your pay. 3  Income tax deducted from your pay. Provide TD1 Form to calculate how much income tax to deduct.  Other deductions from your pay.