Federal Social Security and Medicare Tax on Unreported Tip Income
Extracted from PDF file 2018-federal-form-4137.pdf, last modified November 2018
Social Security and Medicare Tax on Unreported Tip IncomeForm 4137 Department of the Treasury Internal Revenue Service (99) Social Security and Medicare Tax on Unreported Tip Income OMB No. 1545-0074 Go to www.irs.gov/Form4137 for the latest information. Attach to Form 1040, Form 1040NR, Form 1040NR-EZ, Form 1040-SS, or Form 1040-PR. ▶ ▶ Social security number Name of person who received tips. If married, complete a separate Form 4137 for each spouse with unreported tips. 1 (a) Name of employer to whom you were required to but didn’t report all your tips (see instructions) (b) Employer identification number (see instructions) 2018 Attachment Sequence No. 24 (c) Total cash and charge tips you received (including unreported tips) (see instructions) (d) Total cash and charge tips you reported to your employer A B C D E 2 Total cash and charge tips you received in 2018. Add the amounts from line 1, column (c) . . . . . . . . . . . 2 3 Total cash and charge tips you reported to your employer(s) in 2018. Add the amounts from line 1, column (d) . . . . . . . . . . . . . . . . . . . . . . . . . 4 Subtract line 3 from line 2. This amount is income you must include in the total on Form 1040, line 1; Form 1040NR, line 8; or Form 1040NR-EZ, line 3 . . . . . . . . . . 5 Cash and charge tips you received but didn’t report to your employer because the total was less than $20 in a calendar month (see instructions) . . . . . . . . . . . . . 6 Unreported tips subject to Medicare tax. Subtract line 5 from line 4 . 7 Maximum amount of wages (including tips) subject to social security tax . . . . . . . . . . . . . . . . 7 . . . . . . . 8 Total social security wages and social security tips (total of boxes 3 and 7 shown on your Form(s) W-2) and railroad retirement (RRTA) compensation (subject to 6.2% rate) (see instructions) . . . . . . . . . . . . . . . . . . 8 9 Subtract line 8 from line 7. If line 8 is more than line 7, enter -0- . . . . . . . . . 10 Unreported tips subject to social security tax. Enter the smaller of line 6 or line 9. If you received tips as a federal, state, or local government employee, see instructions . . . . 11 Multiply line 10 by 0.062 (social security tax rate) . . . . . . . . . . . . . . 12 Multiply line 6 by 0.0145 (Medicare tax rate) . . . . . . . . . . . . . . . . 13 Add lines 11 and 12. Enter the result here and on Schedule 4 (Form 1040), line 58; Form 1040NR, line 56; or Form 1040NR-EZ, line 16 (Form 1040-SS and 1040-PR filers, see instructions.) . . . . . . . . . . . . . . . . . . . . . . . . . . General Instructions Future Developments For the latest information about developments related to Form 4137 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/Form4137. What’s New For 2018, the maximum wages and tips subject to social security tax increases to $128,400. The social security tax rate an employee must pay on tips remains at 6.2% (0.062). Reminder A 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act compensation, and self-employment income over a threshold amount based on your filing status. Use Form 8959, Additional Medicare Tax, to figure this tax. For more information on the Additional Medicare Tax, see “What is the Additional Medicare Tax?” at www.irs.gov/AdMT. Purpose of form. Use Form 4137 only to figure the social security and Medicare tax owed on tips you didn’t report to your employer, including any allocated tips shown on your Form(s) W-2 that you must report as income. You also must report the income on Form 1040, line 1; Form 1040NR, line 8; or For Paperwork Reduction Act Notice, see your tax return instructions. 3 4 5 6 9 10 11 12 13 Form 1040NR-EZ, line 3. By filing this form, your social security and Medicare tips will be credited to your social security record (used to figure your benefits). Don’t use Form 4137 as a substitute Form W-2. If you believe you’re an employee and you received Form 1099MISC, Miscellaneous Income, CAUTION instead of Form W-2, Wage and Tax Statement, because your employer didn’t consider you an employee, don’t use this form to report the social security and Medicare tax on that income. Instead, use Form 8919, Uncollected Social Security and Medicare Tax on Wages. ! ▲ Cat. No. 12626C Form 4137 (2018) Page 2 Form 4137 (2018) Who must file. You must file Form 4137 if you received cash and charge tips of $20 or more in a calendar month and didn’t report all of those tips to your employer. You also must file Form 4137 if your Form(s) W-2, box 8, shows allocated tips that you must report as income. Allocated tips. You must report all your tips from 2018, including both cash tips and noncash tips, as income on Form 1040, line 1; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Any tips you reported to your employer in 2018 are included in the wages shown on your Form W-2, box 1. Add to the amount in box 1 only the tips you received in 2018 and didn’t report to your employer. This should include any allocated tips shown on your Form(s) W-2, box 8, unless you have adequate records to show that your unreported tips are less than the amount in box 8. Although allocated tips are shown on your Form W-2, they aren’t included in box 1 on that form and no tax is withheld from these tips. Tips you must report to your employer. You must give your employer a written report of cash and charge tips if you received $20 or more in tips during a month. If, in any month, you worked for two or more employers and received tips while working for each, the $20 rule applies separately to the tips you received while working for each employer and not to the total you received. Your reportable tips include cash tips received from customers, charged tips (credit and debit card charges) distributed to you by your employer, and tips received from other employees under any tip-sharing arrangement. You must report your tips to your employer by the 10th day of the month following the month you received them. If the 10th day of the month falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next business day. For example, because March 10, 2019, is a Sunday, you must report your tips received in February 2019 by March 11, 2019. Employees subject to the Railroad Retirement Tax Act. Don’t use Form 4137 to report tips received for work covered by the Railroad Retirement Tax Act. To get railroad retirement credit, you must report these tips to your employer. Payment of tax. Tips you reported to your employer are subject to social security and Medicare tax (or railroad retirement tax), Additional Medicare Tax, and income tax withholding. Your employer collects these taxes from wages (excluding tips) or other funds of yours available to cover them. If your wages weren’t enough to cover these taxes, you may have given your employer the additional amounts needed. Your Form W-2 will include the tips you reported to your employer and the taxes withheld. If there wasn’t enough money to cover the social security and Medicare tax (or railroad retirement tax), your Form W-2 also will show the uncollected tax due in box 12 with codes A and B. See the instructions for Schedule 4 (Form 1040), line 62, or Form 1040NR, line 60, to find out how to report the tax due. If you worked in American Samoa, Guam, or the U.S. Virgin Islands, the amount of uncollected tax due is identified in box 12 on Form W-2AS, W-2GU, or W-2VI with codes A and B. If you worked in Puerto Rico, Form 499R-2/ W-2PR, boxes 22 and 23, show the uncollected tax due. Unlike the uncollected portion of the regular (1.45%) Medicare tax, the uncollected Additional Medicare Tax isn’t reported on Form W-2, box 12, with code B. Penalty for not reporting tips. If you didn’t report tips to your employer as required, you may be charged a penalty equal to 50% of the social security, Medicare, and Additional Medicare Taxes due on those tips. You can avoid this penalty if you can show (in a statement attached to your return) that your failure to report tips to your employer was due to reasonable cause and not due to willful neglect. Additional information. See Pub. 531, Reporting Tip Income. See Rev. Rul. 2012-18 for guidance on taxes imposed on tips, and the difference between tips and service charges. You can find Rev. Rul. 2012-18, 2012-26 I.R.B. 1032 at www.irs.gov/ irb/2012-26_IRB#RR-2012-18. Specific Instructions Line 1. Complete a separate line for each employer. If you had more than five employers in 2018, attach a statement that contains all of the information (and in a similar format) as required on Form 4137, line 1, or complete and attach line 1 of additional Form(s) 4137. Complete lines 2 through 13 on only one Form 4137. The line 2 and line 3 amounts on that Form 4137 should be the combined totals of all your Forms 4137 and attached statements. Include your name, social security number, and calendar year (2018) on the top of any attachment. Column (a). Enter your employer’s name exactly as shown on your Form W-2. Column (b). For each employer’s name you entered in column (a), enter the employer identification number (EIN) or the words “Applied For” exactly as shown on your Form W-2. Column (c). Include all cash and charge tips you received. This includes the following tips. • Total tips you reported to your employer on time. Tips you reported, as required, by the 10th day of the month following the month you received them are considered income in the month you reported them. For example, tips you received in December 2017 that you reported to your employer after December 31, 2017, but by January 10, 2018, are considered income in 2018 and should be included on your 2018 Form W-2 and reported on Form 4137, line 1. However, tips you received in December 2018 that you reported to your employer after December 31, 2018, but by January 10, 2019, are considered income in 2019. Don’t include these tips on line 1. • Tips you didn’t report to your employer on time or didn’t report at all (include any allocated tips shown in box 8 on your Form(s) W-2 unless you can prove that your unreported tips are less than the amount in box 8). These tips are considered income to you in the month you actually received them. For example, tips you received in December 2018 that you reported to your employer after January 10, 2019, are considered income in 2018 because you didn’t report them to your employer on time. • Tips you received that you weren’t required to report to your employer because they totaled less than $20 during the month. • Allocated tips you must report as income (see Allocated tips above). Line 5. Enter only the tips you weren’t required to report to your employer because the total received was less than $20 in a calendar month. These tips aren’t subject to social security and Medicare tax. Line 6. Enter this amount on Form 8959, line 2, if you’re required to file that form. Line 8. For railroad retirement (RRTA) compensation, don’t include an amount greater than $128,400, which is the amount subject to the 6.2% rate for 2018. Line 10. If line 6 includes tips you received for work you did as a federal, state, or local government employee and your pay was subject only to the 1.45% Medicare tax, subtract the amount of those tips from the line 6 amount only for the purpose of comparing lines 6 and 9. Don’t reduce the actual entry on line 6. Enter “1.45% tips” and the amount you subtracted on the dotted line next to line 10. Line 11. Multiply the amount on line 10 by 0.062 (the social security rate for 2018). Line 13. Form 1040-SS and Form 1040-PR filers, include the amount from line 13 on Form 1040-SS or Form 1040-PR, line 6. See the instructions for Form 1040-SS or Form 1040-PR for more information.
2018 Form 4137
More about the Federal Form 4137 Individual Income Tax
We last updated the Social Security and Medicare Tax on Unreported Tip Income in December 2018, and the latest form we have available is for tax year 2018. This means that we don't yet have the updated form for the current tax year. Please check this page regularly, as we will post the updated form as soon as it is released by the Federal Internal Revenue Service. You can print other Federal tax forms here.
Other Federal Individual Income Tax Forms:
|Form Code||Form Name|
|Form 1040||U.S. Individual Income Tax Return|
|Form 1040-V||Payment Voucher|
|1040 (Schedule B)||Interest and Ordinary Dividends|
|1040 (Schedule A)||Itemized Deductions|
|Form 1040-INS||Form 1040 Instructional Booklet|
The Internal Revenue Service usually releases income tax forms for the current tax year between October and January, although changes to some forms can come even later. We last updated Federal Form 4137 from the Internal Revenue Service in December 2018.
About the Individual Income Tax
The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.
Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!
Historical Past-Year Versions of Federal Form 4137
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