IRS Form 4070 Instructions
If you’re a tip employee, you probably know that the Internal Revenue Service expects you to report all tip income when you file your tax return. You might not know that you also must report all tip income to your employer in any month where your tips are greater than $20. To do this, you may file IRS Form 4070, Employee’s Report of Tips to Employer.
In this article, we’ll walk through this tax form, including:
- How to use Form 4070 to report tips to your employer
- Alternatives to using IRS Form 4070 to keep track of tips
- Frequently asked questions about reporting tip income
Let’s start with a comprehensive view of the tax form itself.
Table of contents
How do I complete IRS Form 4070?
This one-page tax form is fairly simple to complete. Let’s start at the top.
Top of form
At the top of the form, you’ll see space for employee name, address, and Social Security number. Enter this information in the space provided:
- Employee name: Enter first name, middle initial, and last name
- Employee address: Enter the complete mailing address, to include:
- Street name and street number
- City
- State
- Zip code
- Social Security number
Left side
On the left side of the form, enter the employer’s name and address. For restaurants or large food and beverage establishments, include the establishment name as applicable.
Month in which tips were received
Enter the beginning date and ending date of the calendar month that you are reporting your tip income. If the period is less than a complete month, then enter the actual dates that you received tip income.
Signature: sign the form at the bottom.
Right side
The right side of the form will contain tip information from the tipped employee.
Line 1: Cash tips received
In Line 1, enter the total amount of tips that you received in the form of cash.
Line 2: Credit and debit card tips received
In Line 2, enter the total amount of employee tips that you received from electronic payment methods, such as credit card tips. You should also use this line to report tip money from debit cards, gift cards, or any other electronic payment method.
Line 3: Tips paid out
Many establishments have a tip-sharing program, where employees will create a tip pool. This helps tip employees on days where they might not receive much tip income.
If you paid out some of your tip income as part of a tip-sharing program or tip pool, enter that amount in Line 3.
Line 4: Net tips
Add Line 1 & Line 2. Subtract Line 3 from this amount. The result represents your total employee tip income.
Date
Enter the date you signed the employee’s report. When reporting tip income for tax purposes, the due date is the tenth day of the following month that you are reporting your total tips. For example, a March tip report would be due by April 10th.
If the 10th day of the month falls on a weekend or a legal holiday, then you may submit your employee’s tip report on the next business day.
Video walkthrough
Watch this instructional video to learn how to report monthly tip income on IRS Form 4070.
Frequently asked questions
No. According to the Internal Revenue Service, if the total amount of tips employees report to a large food or beverage establishment owner is less than 8 percent, then the employer must allocate the difference among the employees who receive tips. You should report allocated tips as taxable income on your tax return, but not on Form 4070.
According to the IRS, employees must maintain a record of daily tips, report tip income over $20 to their employer monthly, include all tips in total income on their income tax return, and pay federal income taxes on all tips received.
No. Charges added to a check by your employer, such as a service charge for large parties, do not go on IRS Form 4070. Revenue Ruling 2012-18 contains additional information about the difference between tips and service charges.
No. The IRS also provides IRS Form 4070-A, Employee’s Daily Record of Tips, as another way to keep track of tips for tax purposes.
Where can I find IRS Form 4070?
You can download Form 4070, as well as IRS Form 4070-A, from the IRS website. For your convenience, we’ve attached the latest version of Form 4070 to this article.
