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 receive gratuities from their customers use this form to report their tip income 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.

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.

Who Can File Form 4070?

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

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% 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% are not counted.

If the amount of tips reported by employees is under 8% of receipts, the employer must allocate the difference between the reported tip income and 8% 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 withhold from employees. Employers are required to withhold federal income, Social Security and Medicare taxes on employee tip income. These taxes can be withheld through the employee’s wages or through another method.

Employers that run food and beverage businesses in the U.S. must file Form 8027 if tipping is customary at their establishments and if they employ more than 10 workers on a typical business day. Instructions for Form 8027 provide a worksheet to help employers determine if they meet the 10-employee test.

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

You can download a copy of Form 4070: Employee's Report of Tips to Employer from the IRS website.