Department of the Treasury
Internal Revenue Service
Instructions for Form 8027
Employer’s Annual Information Return of
Tip Income and Allocated Tips
Section references are to the Internal Revenue Code unless otherwise noted.
6. Divide line 3 by line 4. . . . . . . . . . . . . . . . . . . . . . .
7. Add lines 5 and 6. If line 7 is greater than 80 (hours),
Items To Note
you are required to file Form 8027 for 2002. . . . . . . .
Check one of the “Yes” or “No” boxes under employer’s name and
Note: The filing requirement (more than 10 employees) is based on the
address to indicate whether or not the establishment accepts credit
total of all employees who provided services in connection with the
cards or other credit arangements. If the “Yes” box is checked, lines 1
provision of food and beverages at the establishment, not just the
and 2 of Form 8027 must be completed. Also see the instructions for
number of directly tipped employees. Include employees such as
lines 1 and 2 on page 3.
waitstaff, bussers, bartenders, seat persons, wine stewards, cooks, and
Complete the Worksheet for Determining Whether To File Form
kitchen help. See Regulations section 31.6053-3(j)(10) for more
8027 (below) to determine if you are required to file Form 8027.
You may want to use the Employer’s Optional Worksheet for
A person who owns 50% or more in value of the stock of a
Tipped Employees on page 4 as a means of checking to see if your
corporation that runs the establishment is not considered an employee
employees are reporting all of their tip income to you.
when determining whether the establishment normally employs more
Purpose of Form
than 10 individuals.
New large food or beverage establishment. File Form 8027 for a
Form 8027 is used by large food or beverage establishments when the
new large food or beverage establishment if, during any 2 consecutive
employer is required to make annual reports to the IRS on receipts from
calendar months, the average number of hours worked each business
food or beverage operations and tips reported by employees.
day by all employees is more than 80 hours. To figure the average
number of employee hours worked each business day during a month,
All employees receiving $20.00 or more a month in tips must
divide the total hours all employees worked during the month by the
report 100% of their tips to their employer.
number of days the establishment was open for business. After the test
is met for 2 consecutive months, you must file a return covering the rest
of the year, beginning with the next payroll period.
Who Must File
Exceptions To Filing
If you are an employer who operates a large food or beverage
A return is not required for:
establishment, you must file Form 8027. If you own more than one
Establishments operated for less than 1 month in calendar year 2002.
establishment, you must file Form 8027 for each one. There may be
Fast food restaurants and operations where tipping is not customary
more than one establishment (business activity providing food or
such as cafeterias or operations where 95% of the total sales are
beverages) operating within a single building, and, if gross receipts are
carryout sales or sales with a service charge of 10% or more.
recorded separately, each activity is required to file a Form 8027.
When To File
A return is required only for establishments in the 50 states and the
District of Columbia.
File Form 8027 (and Form 8027-T when filing more than one Form
8027) by February 28, 2003. However, the due date if you file
If you are required to report for more than one establishment,
electronically (not by magnetic media) is March 31, 2003.
you must complete and file Form 8027-T, Transmittal of
Extension of time to file. Filers of Form 8027 submitted on paper, on
Employer’s Annual Information Return of Tip Income and
magnetic media, or electronically may request an extension of time to
Allocated Tips, with Forms 8027.
file on Form 8809, Request for Extension of Time To File Information
Returns. File Form 8809 as soon as you know an extension of time to
A large food or beverage establishment is one to which all of the
file is necessary, but not later than February 28, 2003.
Food or beverage is provided for consumption on the premises.
Where To File
Tipping is a customary practice.
More than 10 employees, who work more than 80 hours, were
File with the Internal Revenue Service Center, Andover, MA 05501.
normally employed on a typical business day during the preceding
Reporting on magnetic media. If you are the employer and you file
250 or more Forms 8027, you must file the returns on magnetic media
(or electronically). For details, see Regulations section 301.6011-2.
Worksheet for Determining Whether
Specifications for filing. Get the Nov. 2000 revision of Pub. 1239,
To File Form 8027
Specifications for Filing Form 8027, Employer’s Annual Information
Complete the worksheet below to determine if you had more than 10
Return of Tip Income and Allocated Tips, Magnetically/Electronically.
employees on a typical business day during 2001 and, therefore, are
This publication provides instructions on how to file and how to request
required to file Form 8027 for 2002. It is the average number of
a waiver from magnetic media reporting because of undue hardship.
employee hours worked on a typical business day that determines
whether or not you employed more than 10 employees.
The law provides for a penalty if you do not file Form 8027 (and Form
1. Enter one-half of the total employee hours worked
8027-T) on time unless you can show reasonable cause for the delay.
during the month in 2001 with the greatest aggregate
Employers filing late (after the due date including extensions) should
gross receipts from food and beverages . . . . . . . . . .
attach an explanation to the return to show reasonable cause.
2. Enter the number of days opened for business during
You may be charged penalties for each failure to —
Timely file an information return including failure to file on magnetic
the month shown in line 1 . . . . . . . . . . . . . . . . . . . .
media, if required.
3. Enter one-half of the total employee hours worked
Furnish the employee’s TIN (taxpayer identification number, usually
during the month in 2001 with the least aggregate
the social security number) on Form W-2, Wage and Tax Statement.
gross receipts from food and beverages . . . . . . . . . .
Timely file Form W-2 and give a Form W-2 to the employee.
Include your EIN on any return, statement, or document.
4. Enter the number of days opened for business during
Include correct information on a return or statement. This penalty
the month shown in line 3. . . . . . . . . . . . . . . . . . . .
applies to the omission of information as well as the inclusion of
5. Divide line 1 by line 2. . . . . . . . . . . . . . . . . . . . . . .
Cat. No. 61013P