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 2004. . . . . . . .
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.
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.
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,
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:
establishment, you must file Form 8027 for each one. There may be
Establishments operated for less than 1 month in calendar year 2004.
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
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
file is necessary, but not later than February 28, 2005.
Food or beverage is provided for consumption on the premises.
Tipping is a customary practice.
Where To File
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.
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. Enter one-half of the total employee hours worked
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 —
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.
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. . . . . . . . . . . . . . . . . . . .
Timely file Form W-2 and give a Form W-2 to the employee.
5. Divide line 1 by line 2. . . . . . . . . . . . . . . . . . . . . . .
Include your EIN on any return, statement, or document.
Cat. No. 61013P