What Is Form 4070: Employee's Report of Tips to Employer?

Form 4070: Employee's Report of Tips to Employer is a tax form distributed by the Internal Revenue Service (IRS). Employees who are compensated by tips use this form to report those tips to their employers. Tips can be earned by cash directly from customers, a tip-sharing program, as well as those received through credit or debit cards.

Who Can File Form 4070: Employee's Report of Tips to Employer?

Form 4070: Employee's Report of Tips to Employer is filed by employees who are compensated by tips. Any tips earned over $20 per month must be reported. These must be submitted in their report by the tenth day of the following month, unless that day is a holiday or weekend. Daily tips are tabulated on Form 4070A, which is explained below.

How to File Form 4070: Employee's Report of Tips to Employer

The form must contain the employee’s name, address, Social Security number, the month covered by the report, and the total amount of tips received. It must also contain the employer’s name and address. After filling out the report, the employee must sign it.

Instead of submitting the actual form, employees may submit a substitute document that contains all of this information.

Special Considerations for Form 4070

An employer must make sure the total income they report for a given period is at minimum 8 percent of their total receipts for that time. Not all receipts must be included in this calculation. For example, carry-out sales and sales that include a service charge of at least 10 percent are not counted.

If the amount of tips reported by employees is under 8 percent of receipts, the employer must allocate the difference between the reported tip income and 8 percent of the receipt gross.

Other Relevant Forms

Form 4070 is a monthly summary of all tips received and is used in conjunction with form 4070A. This form allows employees to keep track of tips received on a daily basis. It also allows employers to calculate the amount of tax they must collect from employees. Employers are required to collect income tax, Social Security tax, and Medicare tax on employee tips. These taxes can be collected through the employee’s wages or through another method.

Food and beverage establishments in the U.S. must file Form 8027 because many employees at these establishments earn a significant amount of their income through tips. According to the IRS, businesses required to file this form include anywhere food or drink is consumed on the premises, tipping is customary, and “more than 10 employees who work more than 80 hours were normally employed on a typical business day within the preceding calendar year.”

Download Form 4070: Employee's Report of Tips to Employer

Click this link to download a copy of Form 4070: Employee's Report of Tips to Employer.

Key Takeaways

  • Form 4070 is used by employees who are compensated by tips to report those tips to their employers.
  • Any tips earned over $20 per month must be reported on the form, which must be submitted by the tenth day.
  • Employees document their daily tips on Form 4070A.