Form 8846 - Credit For Employer Social Security And Medicare Taxes Paid On Certain Employee Tips - 2017 Page 2
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Form 8846 (2017)
Page
General Instructions
Therefore, the amount of tips for any
subject to the 6.2% rate, check the
month that are used to figure the
box on line 4 and attach a separate
Section references are to the Internal
credit must be reduced by the amount
computation showing the amount of
Revenue Code unless otherwise
by which the wages that would have
tips subject to only the Medicare tax
noted.
been payable during that month at
rate of 1.45%. Subtract these tips
Future Developments
$5.15 an hour exceed the wages
from the line 3 tips, and multiply the
(excluding tips) paid by the employer
difference by 0.0765. Then, multiply
For the latest information about
during that month.
the tips subject only to the Medicare
developments related to Form 8846
tax by 0.0145. Enter the sum of these
For example, an employee worked
and its instructions, such as legislation
amounts on line 4.
100 hours and received $450 in tips
enacted after they were published, go
for October 2017. The worker received
Reduce the income tax deduction
to
$375 in wages (excluding tips) at the
for employer social security and
Purpose of Form
rate of $3.75 an hour. If the employee
Medicare taxes by the amount on line
had been paid $5.15 an hour, the
4.
Certain food and beverage
establishments (see Who Should File
employee would have received wages,
Fiscal year taxpayers. If you have an
excluding tips, of $515. For credit
below) use Form 8846 to claim a credit
employee with wages and tips paid in
purposes, the $450 in tips is reduced
for social security and Medicare taxes
2018 that exceeded the 2018 social
paid or incurred by the employer on
by $140 (the difference between $515
security wage base of $128,400 by the
certain employees’ tips. The credit is
and $375), and only $310 of the
end of the 2017 fiscal year, follow the
employee’s tips for October 2017 is
part of the general business credit.
Line 4 instructions above to determine
taken into account.
the amount to enter on that line. The
You can claim or elect not to claim
A 0.9% Additional Medicare Tax
determination whether the tipped
the credit any time within 3 years from
the due date of your return on either
applies to Medicare wages and tips.
employee's wages exceeds the social
your original return or on an amended
However, Additional Medicare Tax is
security wage base is made for each
only imposed on the employee. There
calendar year.
return.
is no employer share of Additional
Partnerships and S corporations
Paperwork Reduction Act Notice.
Medicare Tax. Thus, there is no effect
must file this form to claim the credit.
on the credit for employer social
We ask for the information on this form
All other taxpayers are not required to
security and Medicare taxes on certain
to carry out the Internal Revenue laws
complete or file this form if their only
of the United States. You are required
employee tips.
source for this credit is a partnership
to give us the information. We need it
or S corporation. Instead, they can
Specific Instructions
to ensure that you are complying with
report this credit directly on line 4f in
these laws and to allow us to figure
Figure the current year credit from
Part III of Form 3800, General
and collect the right amount of tax.
your trade or business on lines 1
Business Credit.
through 4.
You are not required to provide the
For information regarding taxes
information requested on a form that is
imposed on tips, including information
Line 1
subject to the Paperwork Reduction
on the difference between tips and
Enter the tips received by employees
Act unless the form displays a valid
service charges, see Rev. Rul.
for services on which you paid or
OMB control number. Books or
2012-18, 2012-26 I.R.B. at
incurred employer social security and
records relating to a form or its
gov/irb/2012-26_IRB#RR-2012-18.
Medicare taxes during the tax year.
instructions must be retained as long
Who Should File
Include tips received from
as their contents may become material
customers for providing, delivering, or
in the administration of any Internal
File Form 8846 if you meet both of the
serving food or beverages for
Revenue law. Generally, tax returns
following conditions.
consumption if tipping of employees
and return information are confidential,
1. You had employees who received
for delivering or serving food or
as required by section 6103.
tips from customers for providing,
beverages is customary.
The time needed to complete and
delivering, or serving food or
Line 2
file this form will vary depending on
beverages for consumption if tipping
individual circumstances. The
of employees for delivering or serving
If you pay each tipped employee
estimated burden for individual and
food or beverages is customary.
wages (excluding tips) equal to or
business taxpayers filing this form is
more than $5.15 an hour, enter zero on
2. During the tax year, you paid or
approved under OMB control number
line 2.
incurred employer social security and
1545-0074 and 1545-0123 and is
Medicare taxes on those tips.
Figure the amount of tips included
included in the estimates shown in the
on line 1 that are not creditable for
How the Credit Is Figured
instructions for their individual and
each employee on a monthly basis.
business income tax return.
Generally, the credit equals the
This is the total amount that would be
amount of employer social security
If you have comments concerning
payable to the employee at $5.15 an
and Medicare taxes paid or incurred
the accuracy of these time estimates
hour reduced by the wages (excluding
by the employer on tips received by
or suggestions for making this form
tips) actually paid to the employee
the employee. However, employers
simpler, we would be happy to hear
during the month. Enter on line 2 the
cannot claim the credit for taxes on
from you. See the instructions for the
total amounts figured for all
any tips that are used to meet the
tax return with which this form is filed.
employees.
federal minimum wage rate in effect on
Line 4
January 1, 2007, $5.15 an hour.
If any tipped employee’s wages and tips
exceeded the 2017 social security tax
wage base of $127,200
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