University of Central Florida (UCF) ACG3173 Accounting for Decision-Makers Exam 2 Practice

The Medicare Tax is specifically associated with Medicare, which is a federal program that provides healthcare coverage primarily for individuals aged 65 and older, as well as certain younger individuals with disabilities. The Medicare Tax is a payroll tax levied on employees and employers to fund the Medicare program. This tax contributes to the Social Insurance Trust Fund, which finances Medicare benefits, ensuring that retirees have access to healthcare services during their retirement years.

While Federal Income Tax and State Income Tax are also collected from individuals, they are not directly tied to Medicare and instead fund various government activities and services. The Social Security Tax, on the other hand, is specifically designed to fund Social Security benefits, which provide income support to the elderly and disabled, but it does not directly fund Medicare. Therefore, the Medicare Tax is the correct answer as it is the only tax specifically linked to funding Medicare, a critical component of retirement healthcare for many Americans.