Note. When filing a paper Form 8027, attach a copy of your
1. Enter one-half of the total employee hours worked
timely filed Form 8809, a copy of your approved waiver (Form
during the month in 2014 with the greatest
8508) from filing Form 8027 electronically, and a copy of your
aggregate gross receipts from food and
“lower rate” determination letter from the IRS. Don't attach
. . . . . . . . . . . . . . . . . . . . . . . .
any other documents.
2. Enter the number of days opened for business
during the month shown in line 1.
Reporting and filing electronically. If you are the
. . . . . . . . . .
employer and you are required to file 250 or more Forms
3. Enter one-half of the total employee hours worked
8027, you must file the returns electronically. See Pub. 1239
during the month in 2014 with the least aggregate
for information on filing Form 8027 electronically.
gross receipts from food and beverages.
. . . . .
4. Enter the number of days opened for business
during the month shown in line 3.
. . . . . . . . . .
The law provides for a penalty if you don't file Form 8027
5. Divide line 1 by line 2.
. . . . . . . . . . . . . . . . .
(and Form 8027-T) on time unless you can show reasonable
cause for the delay. In addition, if you don't complete an
6. Divide line 3 by line 4.
. . . . . . . . . . . . . . . . .
accurate Form 8027, you won't be able to correctly prepare
7. Add lines 5 and 6. If line 7 is greater than 80 (hours),
Forms W-2, Wage and Tax Statement, for each directly
you must file Form 8027 for 2015.
. . . . . . . . .
tipped employee for whom a tip allocation was required to be
made. You may be charged penalties for each failure to:
Timely file a correct information return (Forms 8027 and
If your answer on line 7 of the worksheet is more than 80
W-2) including failure to file electronically if required; and
hours, then you meet the 10-employee test.
Timely furnish a correct Form W-2 to the employee.
If you meet the 10-employee test, file a separate
For more information on penalties for untimely or incorrect
Form 8027 for each food or beverage operation
Forms W-2 or 8027, see Pub. 1239 and the General
where tipping is customary. This is true even if an
Instructions for Forms W-2 and W-3.
individual operation, when considered separately, doesn't
have more than 10 employees on a typical business day.
Gross receipts include all receipts (other than nonallocable
If you are required to report for more than one establishment,
receipts, see definition below) from cash sales, charge
you must complete and file Form 8027-T, Transmittal of
receipts, charges to a hotel room (excluding tips charged to
Employer's Annual Information Return of Tip Income and
the hotel room if your accounting procedures allow these tips
Allocated Tips, with Forms 8027. Attach Forms 8027 in
to be separated), and the retail value of complimentary food
establishment number order (lowest to highest). For more
or beverages served to customers as explained below.
information on establishment numbers, see Establishment
Also include charged tips in gross receipts, but only to the
extent that you reduced your cash sales by the amount of
New business. You are a new business if you opened a
any cash you paid to tipped employees for any charged tips
food or beverage operation during the year and you didn't
due them. However, if you didn't reduce cash sales for
operate any food or beverage operations during the
charged tips paid out to employees, don't include those
preceding calendar year. File Form 8027 for a new food or
charged tips in gross receipts. Don't include state or local
beverage operation if, during any 2 consecutive calendar
taxes in gross receipts.
months, the average number of hours worked each business
Remind all directly and indirectly tipped employees
day by all employees is more than 80 hours. To figure the
to include all charged tips and all cash tips received
average number of employee hours worked each business
in the tip amount that they must report to you.
day during a month, divide the total hours all employees
worked during the month by the number of days the
Nonallocable receipts. These are receipts for carryout
operation was open for business. After the test is met for 2
sales and receipts with a service charge added of 10% or
consecutive months, you must file a return covering the rest
more. Nonallocable receipts generally include all sales on
of the year, beginning with the next payroll period.
which tipping is not customary.
When To File
Complimentary items. Food or beverages served to
customers without charge must be included in gross receipts
File Form 8027 (and Form 8027-T when filing more than one
if (a) tipping for providing them is customary at the
Form 8027) by February 29, 2016. However, if you file
establishment, and (b) they are provided in connection with
electronically, the due date is March 31, 2016.
an activity that is engaged in for profit and whose receipts
Extension of time to file. Filers of Form 8027 submitted on
wouldn't be included in the amount on line 5 of Form 8027.
paper or electronically may request an extension of time to
For example, you would have to include in gross receipts
file on Form 8809. File Form 8809 as soon as you know an
the retail value of the complimentary drinks served to
extension of time to file is necessary, but not later than
customers in a gambling casino because tipping is
February 29, 2016 (March 31, 2016 if you file Forms 8027
customary, the gambling casino is an activity engaged in for
profit, and the gambling receipts of the casino aren't included
Where To File
in the amount on line 5.
However, you wouldn't have to include the retail value of
Mail Form 8027 to:
complimentary hors d'oeuvres at your bar or a complimentary
Department of the Treasury
dessert served to a regular patron of your restaurant in gross
Internal Revenue Service
receipts because the receipts of the bar or restaurant would
Cincinnati, OH 45999
be included in the amount on line 5. You wouldn't have to