If you regard "u" as a correct word, then the whole sentence is perfectly correct.
Thought you knew what it meant a long while before, I presume it's probably in the Top 20 most frequently used American expressions like oh my God, f**k you, how are you doing, what's going on and so forth.
You gotta be kidding me is short for you have got to be kidding me. Only if you already know what kid means as a verb, sir.