IRS Form 4070-A Instructions

The Internal Revenue Service requires tipped employees to report their tip income to their employer for any month in which they received over $20 in tips. The IRS also requires tipped employees to keep a daily record of their tip income. To meet this requirement, the IRS provides IRS Form 4070-A, Employee’s Daily Record of Tips.

In this article, we’ll walk through this tax form, including:

  • How to use IRS Form 4070-A to track your tip income
  • Alternative ways you can track your tips
  • Reasons why keeping track of your daily tips is so important

Let’s get to the heart of this article by walking through IRS Form 4070-A itself.

How do I complete IRS Form 4070-A?

This tax form is fairly straightforward to complete. Let’s start at the top of page 1.

Page 1

On Page 1 of the employee’s daily record, you’ll enter the following information at the top of the form:

  • Employee’s name & address
  • Employer’s name
  • Establishment name, if different from the employer’s name
  • Month & year

Following this, you’ll follow each date according to the days that you work in that month. For example, if your first day worked in the month was the 4th, then your first entry would be on the line marked, ‘4.’

For each day that you work, you’ll need to enter the total amount of tips received, as well as any tips paid out as part of a tip pooling or tip-sharing program. All of your daily entries should have a corresponding date.

Tips received directly from customers & other employees

In Column (a), record any tip money that you received in the form of cash. Also include any tip sharing that you received from other employees as part of a tip pool.

Credit and debit card tips received

In Column (b), enter any noncash tips that you received. This includes non-cash tips from sources like:

  • Credit cards
  • Debit cards
  • Gift cards or other electronic system payments

Do not include service charges that your restaurant or beverage establishment automatically charges for large parties or special events.

Tips paid out to other employees

If you are part of a tip pool or participating in a tip sharing program, then you’ll enter any tip income that you paid out in Column (c).

Names of employees to whom you paid tips

This column helps you keep track of the employees that you paid out tips to, as part of a tip pool. This might include other servers, service bartenders, and other employees who help deliver customer service.

Page 1 of IRS Form 4070A contains employee's name & address, employer's name, month, and year

Page 2

In Page 2, there are dates for the 6th through the 15th of the month.

Form 4070-A, page 2 contains days 6-15

Page 3

On Page 3, you’ll see dates for the 16th through the 25th of the month.

Page 2 contains days 16-25

Page 4

On Page 4, you’ll see dates for the 26th through the 31st day of the month.

At the bottom of Form 4070-A, you’ll add the totals of all items in Columns (a), (b), and (c). You’ll enter these totals in the respective lines on IRS Form 4070, which you’ll report to your employer.

Cash tips received directly from customers and other employees: Report this total on Line 1 of IRS Form 4070.

Credit card tips and debit card tips received: Report this tip amount on Form 4070, Line 2.

Tips that you paid out to other employees: Report this total on Line 3 of Form 4070.

At the bottom of Form 4070-A, page 4, total out the tips received.

Keeping a daily tip record

According to the Internal Revenue Service, every tipped employee must keep track of their daily tips. While IRS Form 4070-A can help keep track of total tip income, it is a voluntary form, and not required.

Here are some other ways that tipped employees may keep track of how much tip income they receive, according to IRS Publication 531, Reporting Tip Income.

  • Write information about your tips in a tip diary
    • Can be Form 4070-A, but doesn’t have to be
  • Keep copies of documents that show your tips
    • Can include things like restaurant bills, tip slips, and credit or debit card charge

Additionally, many restaurants participate in electronic tip reporting programs, which can help track employees’ tip income. If you use an electronic tip system, then you must keep paper copies for your tax records.

Reporting tips to your employer

Why would you want to report tips to your employer? The IRS requires tipped employees to report tips to their employer so that:

  • The employer can withhold federal income tax and payroll taxes, including Social Security & Medicare tax
  • The employer can report the correct amount of Social Security earnings to the Social Security Administration or Railroad Retirement Board
    • This provides Social Security benefits when you retire or become disabled
    • Underreporting Social Security earnings will reduce the Social Security benefits you eventually receive
  • You can avoid tax penalties for not reporting tips to your employer

If you don’t report tips to your employer as required, you may be subject to a penalty equal to 50% of the Social Security, Medicare, Additional Medicare, or other taxes you owe on the unreported tip income, when you file your federal income tax return.

Video walkthrough

Watch this instructional tutorial on how to use IRS Form 4070-A to keep track of your daily tip income.

Frequently asked questions

What is the difference between IRS Form 4070 and IRS Form 4070-A?

Every tipped employee must file IRS Form 4070 with their employer in any month where their tip income exceeds $20. IRS Form 4070-A is a voluntary tax form to help employees keep track of tips for their own records.

When is IRS Form 4070-A due?

IRS Form 4070-A is a voluntary tax form without a due date. However, tipped employees must file their employee’s report, known as IRS Form 4070, with their employer by the tenth day of the following month for every month that their tip income exceeds $20.

Do I report allocated tips on IRS Form 4070-A?

No. Large food and beverage establishments are required to ensure that their employees receive a certain percentage of revenue. They may allocate tip income to employees. Tipped employees will see allocated tips on Form W-2 as part of their compensation

Where can I find IRS Form 4070-A?

While you may find IRS Form 4070-A on the IRS website, we’ve included the most recent version of this PDF form in the article for your convenience.

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