Year-end bonuses paid to employees are not subject to the hospital insurance (HI) part of the FICA tax?

Year-end bonuses paid to employees are indeed subject to the hospital insurance (HI) part of the FICA tax, just like regular wages. The HI tax funds Medicare and applies to all employee earnings, including bonuses. Therefore, employers must withhold the appropriate FICA taxes from these bonuses, as they are considered taxable income. Misunderstanding this can lead to compliance issues for both employers and employees.