Form 4137 - Social Security And Medicare Tax On Unreported Tip Income - 2017 Page 2
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Form 4137 (2017)
Page
Who must file. You must file Form 4137 if
will include the tips you reported to your
• Total tips you reported to your employer on
you received cash and charge tips of $20 or
employer and the taxes withheld. If there
time. Tips you reported, as required, by the
more in a calendar month and didn’t report all
wasn’t enough money to cover the social
10th day of the month following the month
of those tips to your employer. You also must
security and Medicare tax (or railroad
you received them are considered income in
file Form 4137 if your Form(s) W-2, box 8,
retirement tax), your Form W-2 also will show
the month you reported them. For example,
shows allocated tips that you must report as
the uncollected tax due in box 12 with codes
tips you received in December 2016 that you
income.
A and B. See the instructions for Form 1040,
reported to your employer after December 31,
line 62, or Form 1040NR, line 60, to find out
2016, but by January 10, 2017, are
Allocated tips. You must report all your tips
how to report the tax due. If you worked in
considered income in 2017 and should be
from 2017, including both cash tips and
American Samoa, Guam, or the U.S. Virgin
included on your 2017 Form W-2 and
noncash tips, as income on Form 1040, line 7;
Islands, the amount of uncollected tax due is
reported on Form 4137, line 1. However, tips
Form 1040NR, line 8; or Form 1040NR-EZ,
identified in box 12 on Form W-2AS, W-2GU,
you received in December 2017 that you
line 3. Any tips you reported to your employer
or W-2VI with codes A and B. If you worked in
reported to your employer after December 31,
in 2017 are included in the wages shown on
Puerto Rico, Form 499R-2/W-2PR, boxes 22
2017, but by January 10, 2018, are
your Form W-2, box 1. Add to the amount in
and 23, show the uncollected tax due. Unlike
considered income in 2018. Don’t include
box 1 only the tips you received in 2017 and
the uncollected portion of the regular (1.45%)
these tips on line 1.
didn’t report to your employer. This should
Medicare tax, the uncollected Additional
include any allocated tips shown on your
• Tips you didn’t report to your employer on
Medicare Tax isn’t reported on Form W-2,
Form(s) W-2, box 8, unless you have
time or didn’t report at all (include any
box 12, with code B.
adequate records to show that your
allocated tips shown in box 8 on your Form(s)
unreported tips are less than the amount in
Penalty for not reporting tips. If you didn’t
W-2 unless you can prove that your
box 8. Although allocated tips are shown on
report tips to your employer as required, you
unreported tips are less than the amount in
your Form W-2, they aren’t included in box 1
may be charged a penalty equal to 50% of
box 8). These tips are considered income to
on that form and no tax is withheld from these
the social security, Medicare, and Additional
you in the month you actually received them.
tips.
Medicare Taxes due on those tips. You can
For example, tips you received in December
avoid this penalty if you can show (in a
2017 that you reported to your employer after
Tips you must report to your employer. You
statement attached to your return) that your
January 10, 2018, are considered income in
must give your employer a written report of
failure to report tips to your employer was due
2017 because you didn’t report them to your
cash and charge tips if you received $20 or
to reasonable cause and not due to willful
employer on time.
more in tips during a month. If, in any month,
neglect.
you worked for two or more employers and
• Tips you received that you weren’t required
Additional information. See Pub. 531,
received tips while working for each, the $20
to report to your employer because they
rule applies separately to the tips you
Reporting Tip Income. See Rev. Rul. 2012-18
totaled less than $20 during the month.
received while working for each employer and
for guidance on taxes imposed on tips, and
• Allocated tips you must report as income
not to the total you received. Your reportable
the difference between tips and service
(see Allocated tips above).
tips include cash tips received from
charges. You can find Rev. Rul. 2012-18,
Line 5. Enter only the tips you weren’t
customers, charged tips (credit and debit card
2012-26 I.R.B. 1032 at
required to report to your employer because
charges) distributed to you by your employer,
the total received was less than $20 in a
and tips received from other employees under
Specific Instructions
calendar month. These tips aren’t subject to
any tip-sharing arrangement. You must report
social security and Medicare tax.
your tips to your employer by the 10th day of
Line 1. Complete a separate line for each
Line 8. For railroad retirement (RRTA)
the month following the month you received
employer. If you had more than five
compensation, don’t include an amount
them. If the 10th day of the month falls on a
employers in 2017, attach a statement that
greater than $127,200, which is the amount
Saturday, Sunday, or legal holiday, give your
contains all of the information (and in a similar
subject to the 6.2% rate for 2017.
employer the report by the next business day.
format) as required on Form 4137, line 1, or
For example, because March 10, 2018, is a
complete and attach line 1 of additional
Line 10. If line 6 includes tips you received for
Saturday, you must report your tips received
Form(s) 4137. Complete lines 2 through 13 on
work you did as a federal, state, or local
in February 2018 by March 12, 2018.
only one Form 4137. The line 2 and line 3
government employee and your pay was
Employees subject to the Railroad
amounts on that Form 4137 should be the
subject only to the 1.45% Medicare tax,
Retirement Tax Act. Don’t use Form 4137 to
combined totals of all your Forms 4137 and
subtract the amount of those tips from the line
report tips received for work covered by the
attached statements. Include your name,
6 amount only for the purpose of comparing
Railroad Retirement Tax Act. To get railroad
social security number, and calendar year
lines 6 and 9. Don’t reduce the actual entry on
retirement credit, you must report these tips
(2017) on the top of any attachment.
line 6. Enter “1.45% tips” and the amount you
to your employer.
subtracted on the dotted line next to line 10.
Column (a). Enter your employer’s name
Payment of tax. Tips you reported to your
exactly as shown on your Form W-2.
Line 11. Multiply the amount on line 10 by
employer are subject to social security and
0.062 (the social security rate for 2017).
Column (b). For each employer’s name you
Medicare tax (or railroad retirement tax),
entered in column (a), enter the employer
Line 13. Form 1040-SS and Form 1040-PR
Additional Medicare Tax, and income tax
identification number (EIN) or the words
filers, include the amount from line 13 on
withholding. Your employer collects these
“Applied For” exactly as shown on your Form
Form 1040-SS or Form 1040-PR, line 6. See
taxes from wages (excluding tips) or other
W-2.
the instructions for Form 1040-SS or Form
funds of yours available to cover them. If your
1040-PR for more information.
Column (c). Include all cash and charge
wages weren’t enough to cover these taxes,
tips you received. This includes the following
you may have given your employer the
tips.
additional amounts needed. Your Form W-2
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