Form 4137 - Social Security And Medicare Tax On Unreported Tip Income Page 2
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Form 4137 (2010)
Page
Tips you must report to your employer. You must give
Column (a). Enter your employer’s name exactly as it is
your employer a written report of cash and charge tips if you
entered in box c of your Form W-2.
received $20 or more in tips during a month. If, in any month,
Column (b). For each employer’s name you entered in
you worked for two or more employers and received tips
column (a), enter the employer identification number or the
while working for each, the $20 rule applies separately to the
words “applied for” exactly as shown in box b of your Form
tips you received while working for each employer and not to
W-2.
the total you received. Your reportable tips include cash tips
Column (c). Include all cash and charge tips you
received from customers, charged tips distributed to you by
received. This includes the following:
your employer, and tips received from other employees
• Total tips you reported to your employer. Tips you
under any tip-sharing arrangement. You must report your
reported, as required, by the 10th day of the month following
tips to your employers by the 10th day of the month
following the month you received them. If the 10th day of the
the month you received them are considered income in the
month falls on a Saturday, Sunday, or legal holiday, give
month you reported them. For example, tips you received in
your employer the report by the next business day.
December 2009 that you reported to your employer after
Employees subject to the Railroad Retirement Tax Act.
December 31, 2009, but by January 11, 2010, are
Do not use Form 4137 to report tips received for work
considered income in 2010 and should be included on your
covered by the Railroad Retirement Tax Act. In order to get
2010 Form W-2 and reported on line 1 of Form 4137.
railroad retirement credit, you must report these tips to your
However, tips you received in December 2010 that you
employer.
reported to your employer after December 31, 2010, but by
Payment of tax. Tips you reported to your employer are
January 10, 2011, are considered income in 2011. Do not
subject to social security and Medicare tax (or railroad
include these tips on line 1.
retirement tax) and income tax withholding. Your employer
• Tips you did not report to your employer on time or did not
collects these taxes from wages (excluding tips) or other
report at all. These tips are considered income to you in the
funds of yours available to cover them. If your wages were
month you actually received them. For example, tips you
not enough to cover these taxes, you may have given your
received in December 2010 that you reported to your
employer the additional amounts needed. Your Form W-2
employer after January 10, 2011, are considered income in
will include the tips you reported to your employer and the
2010 because you did not report them to your employer on
taxes withheld. If there was not enough money to cover the
social security and Medicare tax (or railroad retirement tax),
time.
your Form W-2 will also show the tax due in box 12 with
• Tips you received that you were not required to report to
codes A and B. See the instructions for Form 1040, line 60;
your employer because they totaled less than $20 during the
or Form 1040NR, line 59 to find out how to report the tax
month.
due. If you worked in American Samoa, Guam, or the U.S.
• Allocated tips you must report as income (see page 1).
Virgin Islands, the amount of uncollected tax due is identified
Line 5. Enter only the tips you were not required to report to
in box 12 on Form W-2AS, W-2GU, or W-2VI with codes A
and B. If you worked in Puerto Rico, Form 499R-2/W-2PR,
your employer because the total received was less than $20
boxes 22 and 23, show the uncollected tax due. See the
in a calendar month. These tips are not subject to social
security and Medicare tax.
instructions for line 5 of Form 1040-PR or 1040-SS to find
out how to report the tax due.
Line 10. If line 6 includes tips you received for work you did
Penalty for not reporting tips. If you did not report tips to
as a federal, state, or local government employee and your
your employer as required, you may be charged a penalty
pay was subject only to the 1.45% Medicare tax, subtract
equal to 50% of the social security and Medicare tax due on
the amount of those tips from the line 6 amount only for the
purpose of comparing lines 6 and 9. Do not reduce the
those tips. You can avoid this penalty if you can show that
your failure to report tips to your employer was due to
actual entry on line 6. Enter “1.45% tips” and the amount
reasonable cause and not due to willful neglect. To do so,
you subtracted on the dotted line next to line 10.
you can attach a statement to your return explaining why
Line 13. Form 1040-SS and Form 1040-PR filers include the
you did not report them.
amount on line 5. See the instructions for line 5 of the form
you file on how to report the tax due.
Additional information. See Pub. 531, Reporting Tip
Income.
Specific Instructions
Line 1. Complete a separate line for each employer. If you
had more than five employers in 2010, attach a statement
that contains all of the information (and in a similar format) as
required on Form 4137, line 1, or complete and attach line 1
of additional Form(s) 4137. Complete lines 2 through 13 on
only one Form 4137. The line 2 and line 3 amounts on that
Form 4137 should be the combined totals of all your Forms
4137 and attached statement.
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