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Ask A CPA - Tip Income Reporting

Employer Tip Reporting To IRS - Form 8027

Employers who operate large food or beverage establishments must file Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips to report employee tip income. A large food or beverage establishment is defined as business where all of the following apply: Food or beverage is provided for consumption on the premises Tipping is a customary practice More than 10 employees, who work more than 80 hours, were normally employed on a typical business day during the preceding calendar year. A worksheet for determining whether a business meets the criteria listed above is included in the Instructions for Form 8027. (http://www.irs.gov/pub/irs-pdf/f8027.pdf).

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