IRS Form 4070 Employee's Report of Tips to Employer

What Is Form 4070?

IRS Form 4070, Employee's Report of Tips to Employer - also known as the IRS tip-reporting form - is a form used by employees receiving tips to report them to their employers. The employer needs this information for proper tax withholding and to report the employee's earnings to the Social Security Administration (SSA).

The most recent version of this form was issued by the Internal Revenue Service (IRS) in August 2005. A fillable IRS Form 4070 is available for download below.

IRS Form 4070 and 4070A

The IRS Form 4070 can be used in conjunction with the IRS Form 4070A, Employee's Daily Record of Tips. This form is used to keep track of tips received every day.

Using the IRS Form 4070A is voluntary, the employee can keep their own daily tips record, as long as it contains the amount of cash tips, tips from credit and debit cards, the value of noncash tips and the number of tips paid to other employees through tip pools or splitting. The names of employees, to whom the tips were paid, should also be included in the record.

The establishment can keep an electronic system of daily tips report. The paper version should be also used in this case.

The information from the daily tips report of any kind should be transferred to the IRS Form 4070.

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

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IRS Form 4070 Instructions

Tips are subjected to the federal income tax and should be properly reported regardless of the employee's wages. The employee should report cash, credit and debit card tips to their employer every month or shorter time periods. Annual tax return should contain the amount of tips received during the year in cash, via cards and in items of value, such as tickets, passes, etc. If tips are shared between employees, each of them should report only the part they received. If the employee received tips less than $20, they do not have to report them.

The employee must also report their allocated tips on their tax return. Do refer to the IRS detailed instructions on what the allocated tips are, how they are calculated and in which cases your employer is obliged to allocate tips.

The employee should report tips by the 10th day of the month following the month that the tips were received. If the 10th day of this month is a Saturday, Sunday or a legal holiday, the tips should be reported on the next business day.

If the employee does not report tips, they are subject to a penalty equal to 50% of all taxes owed on the unreported tips. However, if the employee shows a reasonable cause for not reporting tips to their employer and provides a supporting statement, they can avoid the penalty.

Additional information and instructions for completing the IRS Form 4070 can be found in the IRS Publication 531, issued in 2018.

How to Fill up Form 4070?

  1. 1 to 3. Self-explanatory;
  2. A month or a shorter period in which tips were received. Enter the dates of the beginning and end of the time period you received the reported tips;
  3. Item 1, Cash tips received. Enter the amount you received in tips in cash during the reported time period;
  4. Item 2, Credit and debit card tips received. Enter the amount of tips you received from customers credit and debit cards;
  5. Item 3, Tips paid out. Enter the amounts you paid to other employees;
  6. Item 4, Net tips. Add numbers from Items 1 and 2, subtract the number from Item 3 from this sum, enter the number you got;
  7. Sign and date the report.
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