Instructions For Form 8027 printable pdf download

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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.

General Instructions

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 2004. . . . . . . .

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You must check one of the “Yes” or “No” boxes under employer’s

Note. The filing requirement (more than 10 employees) is based on the

name and address to indicate whether or not the establishment accepts

total of all employees who provided services in connection with the

credit cards, debit cards, or other charges. If the “Yes” box is checked,

provision of food and beverages at the establishment, not just the

lines 1 and 2 of Form 8027 must be completed. Also see the

number of directly tipped employees. Include employees such as

instructions for lines 1 and 2 on page 3.

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waitstaff, bussers, bartenders, seat persons, wine stewards, cooks, and

Complete the Worksheet for Determining Whether To File Form 8027

kitchen help. See Regulations section 31.6053-3(j)(10) for more

(below) to determine if you are required to file Form 8027.

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information.

You may want to use the Employer’s Optional Worksheet for Tipped

Employees on page 4 as a means of determining if your employees are

A person who owns 50% or more in value of the stock of a

reporting all of their tip income to you.

corporation that runs the establishment is not considered an employee

when determining whether the establishment normally employs more

Purpose of Form

than 10 individuals.

Form 8027 is used by large food or beverage establishments when the

New large food or beverage establishment. File Form 8027 for a

employer is required to make annual reports to the IRS on receipts from

new large food or beverage establishment if, during any 2 consecutive

food or beverage operations and tips reported by employees.

calendar months, the average number of hours worked each business

day by all employees is more than 80 hours. To figure the average

All employees receiving $20 or more a month in tips must report

number of employee hours worked each business day during a month,

TIP

100% of their tips to their employer.

divide the total hours all employees worked during the month by the

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

establishment, you must file Form 8027. If you own more than one

A return is not required for:

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establishment, you must file Form 8027 for each one. There may be

Establishments operated for less than 1 month in calendar year 2004.

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more than one establishment (business activity providing food or

Fast food restaurants and operations where tipping is not customary

beverages) operating within a single building, and, if gross receipts are

such as cafeterias or operations where 95% of the total sales are

recorded separately, each activity is required to file a Form 8027.

carryout sales or sales with a service charge of 10% or more.

A return is required only for establishments in the 50 states and the

When To File

District of Columbia.

File Form 8027 (and Form 8027-T when filing more than one Form

8027) by February 28, 2005. However, if you file electronically (not by

If you are required to report for more than one establishment,

magnetic media), the due date is March 31, 2005.

you must complete and file Form 8027-T, Transmittal of

Employer’s Annual Information Return of Tip Income and

Extension of time to file. Filers of Form 8027 submitted on paper, on

CAUTION

Allocated Tips, with Forms 8027.

magnetic media, or electronically may request an extension of time to

file on Form 8809, Application for Extension of Time To File Information

A large food or beverage establishment is one to which all of the

Returns. File Form 8809 as soon as you know an extension of time to

following apply:

file is necessary, but not later than February 28, 2005.

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Food or beverage is provided for consumption on the premises.

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Tipping is a customary practice.

Where To File

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More than 10 employees, who work more than 80 hours, were

normally employed on a typical business day during the preceding

File with the Internal Revenue Service, Cincinnati, OH 45999.

calendar year.

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

Worksheet for Determining Whether

(or electronically). For details, see Regulations section 301.6011-2.

To File Form 8027

Specifications for filing. See Publication 1239, Specifications for

Filing Form 8027, Employer’s Annual Information Return of Tip Income

Complete the worksheet below to determine if you had more than 10

and Allocated Tips, Magnetically or Electronically. This publication

employees on a typical business day during 2003 and, therefore, are

required to file Form 8027 for 2004. It is the average number of

provides instructions on how to file and how to request a waiver from

employee hours worked on a typical business day that determines

magnetic media reporting because of undue hardship. To obtain a copy

of Publication 1239, visit the IRS website at or call

whether or not you employed more than 10 employees.

1-800-TAX-FORM (1-800-829-3676).

1. Enter one-half of the total employee hours worked

Penalties

during the month in 2003 with the greatest aggregate

gross receipts from food and beverages . . . . . . . . . .

The law provides for a penalty if you do not file Form 8027 (and Form

8027-T) on time unless you can show reasonable cause for the delay.

2. Enter the number of days opened for business during

Employers filing late (after the due date including extensions) should

the month shown in line 1 . . . . . . . . . . . . . . . . . . . .

attach an explanation to the return to show reasonable cause.

3. Enter one-half of the total employee hours worked

You may be charged penalties for each failure to —

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during the month in 2003 with the least aggregate

Timely file an information return including failure to file on magnetic

gross receipts from food and beverages . . . . . . . . . .

media, if required.

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Furnish the employee’s TIN (taxpayer identification number, usually

4. Enter the number of days opened for business during

the social security number) on Form W-2, Wage and Tax Statement.

the month shown in line 3. . . . . . . . . . . . . . . . . . . .

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Timely file Form W-2 and give a Form W-2 to the employee.

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5. Divide line 1 by line 2. . . . . . . . . . . . . . . . . . . . . . .

Include your EIN on any return, statement, or document.

Cat. No. 61013P

Instructions For Form 8027

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