Department of the Treasury

Internal Revenue Service

Publication 531

Cat. No. 15059V

Reporting

Tip

Income

For use in preparing

2021 Returns

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Contents

Future Developments ....................... 1

What's New .............................. 1

Reminders ............................... 1

Introduction .............................. 2

Keeping a Daily Tip Record .................. 2

Reporting Tips to Your Employer .............. 3

Reporting Tips on Your Tax Return ............ 5

Allocated Tips ............................ 6

How To Get Tax Help ....................... 7

Index .................................. 11

Future Developments

For the latest information about developments related to 

Pub. 531, such as legislation enacted after it was 

published, go to IRS.gov/Pub531.

What's New

For 2021, the maximum amount of wages and tips subject 

to social security tax is increased to $142,800. The social 

security tax rate an employee must pay on tips remains at 

6.2% (0.062).

Reminders

Additional Medicare Tax. A 0.9% Additional Medicare 

Tax applies to Medicare wages, Railroad Retirement Tax 

Act (RRTA) compensation, and self-employment income 

that are more than:

• $125,000 if married filing separately,

• $250,000 if married filing jointly, or

• $200,000 for any other filing status.

An employer is required to withhold Additional Medicare 

Tax on any Medicare wages or RRTA compensation it 

pays to an employee in excess of $200,000 in a calendar 

year without regard to the employee's filing status.

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Missing & Exploited Children® (NCMEC). Photographs of 

missing children selected by the Center may appear in 

this publication on pages that would otherwise be blank. 

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(1-800-843-5678) if you recognize a child.

Dec 15, 2021
Introduction

This publication is for employees who receive tips.

All tips you receive are income and are subject to federal income tax. You must include in gross income all tips 

you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a 

tip-splitting or tip-pooling arrangement.

The value of noncash tips, such as tickets, passes, or 

other items of value, is also income and subject to tax.

Reporting your tip income correctly isn’t difficult. You 

must do three things.

1. Keep a daily tip record.

2. Report tips to your employer.

3. Report all your tips on your income tax return.

This publication will explain these three things and show 

you what to do on your tax return if you haven’t done the 

first two. This publication will also show you how to treat 

allocated tips.

Comments and suggestions. We welcome your comments about this publication and suggestions for future 

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will 

consider your comments and suggestions as we revise 

our tax forms, instructions, and publications.Don’t send 

tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. If you have 

a tax question not answered by this publication or the How 

To Get Tax Help section at the end of this publication, go 

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search 

feature or viewing the categories listed.

Getting tax forms, instructions, and publications. 

Go to IRS.gov/Forms to download current and prior-year 

forms, instructions, and publications.

Ordering tax forms, instructions, and publications. 

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order 

prior-year forms and instructions. The IRS will process 

your order for forms and publications as soon as possible. 

Don’t resubmit requests you’ve already sent us. You can 

get forms and publications faster online.

Keeping a Daily Tip Record

Why keep a daily tip record? You must keep a daily tip 

record so you can:

• Report your tips accurately to your employer,

• Report your tips accurately on your tax return, and

• Prove your tip income if your return is ever questioned.

How to keep a daily tip record. There are two ways to 

keep a daily tip record. You can either:

• Write information about your tips in a tip diary; or

• Keep copies of documents that show your tips, such 

as restaurant bills and credit or debit card charge 

slips.

You should keep your daily tip record with your tax or 

other personal records. You must keep your records for as 

long as they are important for administration of the federal 

tax law. For information on how long to keep records, see 

How Long To Keep Records in chapter 1 of Pub. 17, Your 

Federal Income Tax.

To help you keep a record or diary of your tips, you can 

use Form 4070A, Employee's Daily Record of Tips. To get 

Form 4070A, ask the IRS or your employer for Pub. 1244, 

Employee's Daily Record of Tips and Report to Employer, 

which includes a 1-year supply of Form 4070A. Pub. 1244 

is also available at IRS.gov/Pub1244. Each day, write in 

the information asked for on the form. A filled-in Form 

4070A is shown on the following page.

In addition to the information asked for on Form 4070A, 

you also need to keep a record of the date and value of 

any noncash tips you get, such as tickets, passes, or 

other items of value. Although you don't report these tips 

to your employer, you must report them on your tax return.

If you don't use Form 4070A, start your records by writing your name, your employer's name, and the name of 

the business (if it's different from your employer's name). 

Then, each workday, write the date and the following information.

• Cash tips you get directly from customers or from 

other employees.

• Tips from credit and debit card charge customers that 

your employer pays you.

• The value of any noncash tips you get, such as tickets, passes, or other items of value.

• The amount of tips you paid out to other employees 

through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you 

paid the tips.

Page 2 Publication 531 (2021)
Sample Filled-in Form 4070A From Publication 1244

6

7

8

9

10

11

12

13

14

15

a. Tips received

directly from customers

and other employees

b. Credit and debit

card tips received

c. Tips paid out to

other employees

d. Names of employees to whom you

paid tips

Date

of

entry

Subtotals

Page 2

Date

tips

rec’d

16

17

18

19

20

21

22

23

24

25

b. Credit and debit

card tips received

c. Tips paid out to

other employees

Subtotals

Page 3

Subtotals

from pages

1, 2, and 3

1. Report total cash tips (col. a) on Form 4070, line 1.

Totals

26

27

28

29

30

31

a. Tips received

directly from customers

and other employees

b. Credit and debit

card tips received

c. Tips paid out to

other employees

d. Names of employees to whom you

paid tips

Date

of

entry

Page 4

Date

tips

rec’d

2. Report total credit and debit card tips (col. b) on Form 4070, line 2.

3. Report total tips paid out (col. c) on Form 4070, line 3.

Form 4070A (Rev. December 2021) OMB No. 1545-0074

1

2

3

4

5

Employee’s Daily Record of Tips This is a voluntary form provided for your convenience.

See instructions for records you must keep.

Employee’s name and address Employer’s name Month and year

Establishment name (if different)

For Paperwork Reduction Act Notice, see Instructions on the back of Form 4070.

a. Tips received

directly from customers

and other employees

b. Credit and debit

card tips received

c. Tips paid out to

other employees

d. Names of employees to whom you

paid tips

Date

of

entry

Subtotals

Page 1

Date

tips

rec’d

Department of the Treasury

Internal Revenue Service

Date

tips

rec’d

Date

of

entry

a. Tips received

directly from customers

and other employees

d. Names of employees to whom you

paid tips

John W. Allen

1117 Maple Ave.

Anytown, NY 14202

Diamond Restaurant

10/3

10/3

10/3

10/5

10/7

- OFF -

48.80

28.00

42.00

40.80

159.60

26.40

21.60

24.00

28.00

100.00

15.20

8.00

10.00

12.00

45.20

Judy Brown

Carl Jones

Judy Brown

Oct.

2021

10/7

10/8

10/9

10/9

- OFF -

37.20

50.80

33.60

30.40

42.00

35.60

- OFF -

48.40

45.20

323.20

22.40

17.20

16.40

22.00

11.60

16.00

14.40

32.00

152.00

8.00

10.00

8.00

9.20

8.80

7.60

12.40

17.20

81.20

Carl Jones

Judy Brown & Carl Jones

Judy Brown

Judy Brown

Carl Jones

Judy Brown

Judy Brown & Brian Smith

Brian Smith

10/16

10/18

10/19

10/21

10/21

10/22

10/24

10/24

10/25

10/26

41.20

39.20

46.80

34.00

- OFF -

34.80

42.40

48.80

33.60

37.20

358.00

18.40

21.20

12.80

19.20

26.00

22.80

17.20

19.20

14.80

171.60

8.80

9.60

8.40

10.00

12.80

12.40

13.60

10.80

9.20

95.60

Judy Brown

Judy Brown

Carl Jones

Judy Brown

Judy Brown & Brian Smith

Carl Jones

Judy Brown

Brian Smith

Judy Brown

10/26

10/27

10/29

10/30

10/31

11/2

31.60

- OFF -

43.20

34.80

46.00

27.60

159.60

323.20 358.00

1,024.00

11.60

14.00

22.40

27.20

20.40

100.00 152.00 171.60

519.20

12.40

12.80

7.20

12.80

6.40

45.20

81.20

95.60

273.60

Judy Brown

Carl Jones

Carl Jones

Judy Brown & Brian Smith

Judy Brown

10/11

10/11

10/14

10/14

10/14

10/16

Electronic tip record. You can use an electronic system provided by your employer to record your daily tips. If 

you do, you must receive and keep a paper copy of this 

record.

Service charges. Don't write in your tip diary the amount 

of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. 

This is part of your wages, not a tip. The following factors 

determine if you have a tip or service charge.

• The payment is made free from compulsion.

• The customer has the right to determine the amount of 

payment.

• The payment isn't subject to negotiation or dictated by 

employer policy.

• The customer generally has the right to determine 

who receives the payment.

See examples below.

Example 1. Good Food Restaurant adds an 18% 

charge to the bill for parties of six or more customers. 

Jane's bill for food and beverages for her party of eight includes an amount on the tip line equal to 18% of the 

charges for food and beverages, and the total includes 

this amount. Because Jane didn’t have an unrestricted 

right to determine the amount on the “tip line,” the 18% 

charge is considered a service charge. Don't include the 

18% charge in your tip diary. Service charges that are 

paid to you are considered wages, not tips.

Example 2. Good Food Restaurant includes sample 

calculations of tip amounts at the bottom of its bills for 

food and beverages provided to customers. David's bill includes a blank “tip line,” with sample tip calculations of 

15%, 18%, and 20% of the charges for food and beverages at the bottom of the bill beneath the signature line. 

Because David is free to enter any amount on the “tip line” 

or leave it blank, any amount he includes is considered a 

tip. Include this amount in your tip diary.

Reporting Tips to Your 

Employer

Why report tips to your employer? You must report 

tips to your employer so that:

• Your employer can withhold federal income tax and 

social security, Medicare, Additional Medicare*, or 

railroad retirement taxes;

• Your employer can report the correct amount of your 

earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits 

when you retire or if you become disabled, or your 

family's benefits if you die); and

• You can avoid the penalty for not reporting tips to your 

employer (explained later).

*See Caution for Uncollected taxes, later.

What tips to report? Report to your employer only cash, 

check, and debit and credit card tips you receive.

If your total tips for any 1 month from any one job are 

less than $20, don't report the tips for that month to that 

employer.

If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Don't report to your employer any portion of the tips you receive 

that you pass on to other employees. However, you must 

report tips you receive from other employees.

Don't report the value of any noncash tips, such as tickets, passes, or other items of value to your employer. You 

Publication 531 (2021) Page 3
don't pay social security, Medicare, Additional Medicare, 

or railroad retirement taxes on these tips.

How to report. If your employer doesn't give you any 

other way to report your tips, you can use Form 4070, Employee's Report of Tips to Employer. Fill in the information 

asked for on the form, sign and date the form, and give it 

to your employer. A sample filled-in Form 4070 is shown 

above. To get a 1-year supply of the form, ask the IRS or 

your employer for Pub. 1244.

If you don't use Form 4070, give your employer a statement with the following information.

• Your name, address, and social security number.

• Your employer's name, address, and business name 

(if it's different from your employer's name).

• The month (or the dates of any shorter period) in 

which you received tips.

• The total tips required to be reported for that period.

You must sign and date the statement. Keep a copy with 

your tax or other personal records.

Your employer may require you to report your tips more 

than once a month. However, the statement can't cover a 

period of more than 1 calendar month.

Electronic tip statement. Your employer can have 

you furnish your tip statements electronically.

When to report. Give your report for each month to your 

employer by the 10th of the next month. If the 10th falls on 

a Saturday, Sunday, or legal holiday, give your employer 

the report by the next day that isn’t a Saturday, Sunday, or 

legal holiday.

Example 1. You must report your tips received in October 2022 by November 10, 2022.

Example 2. You must report your tips received in September 2022 by October 11, 2022. October 10, 2022, is a 

legal holiday (Columbus Day). October 11, 2022, is the 

next day that isn’t a Saturday, Sunday, or legal holiday.

Final report. If your employment ends during the 

month, you can report your tips when your employment 

ends.

Penalty for not reporting tips. 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 railroad retirement taxes you owe on 

the unreported tips. For information about these taxes, 

see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to 

your employer under Reporting Tips on Your Tax Return, 

later. The penalty amount is in addition to the taxes you 

owe.

You can avoid this penalty if you can show reasonable 

cause for not reporting the tips to your employer. To do 

so, attach a statement to your return explaining why you 

didn’t report them.

Giving your employer money for taxes. Your regular 

pay may not be enough for your employer to withhold all 

the taxes you owe on your regular pay plus your reported 

tips. If this happens, you can give your employer money 

until the close of the calendar year to pay the rest of the 

taxes.

If you don't give your employer enough money, your 

employer will apply your regular pay and any money you 

give to the taxes, in the following order.

Sample Filled-in Form 4070 From Publication 1244

Form 4070

(Rev. December 2021) OMB No. 1545-0074

Employee’s Report

of Tips to Employer

Employee’s name and address Social security number

Date

Department of the Treasury

Internal Revenue Service

Signature

Month or shorter period in which tips were received

Employer’s name and address (include establishment name, if different)

from , , to ,

Cash tips received

Credit and debit card tips received

Tips paid out

Net tips (lines 1 + 2 - 3)

1

2

3

4

John W. Allen

1117 Maple Ave.

Anytown, NY 14202 987 00 4321

Diamond Restaurant

834 Main Street

Anytown, NY 14203

1,024.00

519.20

273.60

October 1 2021 October 31 2021 1,269.60

[signed] John W. Allen Nov. 10, 2021

Page 4 Publication 531 (2021)
1. All taxes on your regular pay.

2. Social security, Medicare, Additional Medicare, or 

railroad retirement taxes on your reported tips.

3. Federal, state, and local income taxes on your reported tips.

Any taxes that remain unpaid can be collected by your 

employer from your next paycheck. If withholding taxes 

remain uncollected at the end of the year, you may be 

subject to a penalty for underpayment of estimated taxes. 

See Pub. 505, Tax Withholding and Estimated Tax.

Uncollected taxes. You must report on your tax 

return any social security and Medicare taxes, or 

railroad retirement taxes that remained uncollected at the end of 2021. These uncollected taxes will be 

shown on your 2021 Form W-2. See Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer 

under Reporting Tips on Your Tax Return, later.

A 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, 

and self-employment income that are more than:

• $125,000 if married filing separately,

• $250,000 if married filing jointly, or

• $200,000 for any other filing status.

An employer is required to withhold Additional Medicare 

Tax on any Medicare wages or RRTA compensation it 

pays to an employee in excess of $200,000 in a calendar 

year without regard to the employee's filing status.

Tip Rate Determination and 

Education Program

Your employer may participate in the Tip Rate Determination and Education Program. The program was developed 

to help employees and employers understand and meet 

their tip reporting responsibilities.

There are two agreements under the program: the Tip 

Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC).

If you are employed in the gaming industry, your employer may participate in the Gaming Industry Tip Compliance Agreement Program. See Revenue Procedure 

2007-32, 2007-22, as modified by Revenue Procedure 

2020-47. Revenue Procedure 2007-32 is available at 

IRS.gov/IRB/2007-22_IRB#RP-2007-32. Revenue Procedure 2020-47 is available at IRS.gov/irb/

2020-48_IRB#REV-PROC-2020-47.

Your employer can provide you with a copy of any applicable agreement. To find out more about these agreements, visit IRS.gov and enter “MSU voluntary tip compliance agreements” in the search box. You may also call 

800-829-4933, visit IRS.gov/LocalContacts for the IRS 

Taxpayer Assistance Center in your area, or send an 

email to Tip.Program@IRS.gov and request information 

on this program.

CAUTION

!

Reporting Tips on Your

Tax Return

How to report tips. Report your tips with your wages on 

Form 1040 or 1040-SR, line 1; or Form 1040-NR, line 1a.

What tips to report? Generally, you must report all tips 

you received in 2021 on your tax return including both 

cash tips and noncash tips. Any tips you reported to your 

employer as required in 2021 are included in the wages 

shown in box 1 of your Form W-2. Add to the amount in 

box 1 only the tips you didn’t report to your employer.

However, any tips you received in 2021 that you reported to your employer as required after 2021 but on or before January 10, 2022, aren’t included in the wages shown 

in box 1 of your 2021 Form W-2. Don't include the amount 

of these tips on your 2021 tax return. Instead, include 

them on your 2022 tax return. Tips you received in 2020 

that you reported to your employer as required after 2020 

but on or before January 10, 2021, are included in the wages shown in box 1 of your 2021 Form W-2. Although 

these tips were received in 2020, you must report them on 

your 2021 tax return.

If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Don't report on your income tax return any portion of the tips you 

receive that you pass on to other employees. However, 

you must report tips you receive from other employees.

If you received $20 or more in cash and charge 

tips in a month and didn’t report all of those tips to 

your employer, see Reporting social security, 

Medicare, Additional Medicare, or railroad retirement 

taxes on tips not reported to your employer, later.

If you didn’t keep a daily tip record as required 

and an amount is shown in box 8 of your Form 

W-2, see Allocated Tips, later.

If you kept a daily tip record and reported tips to your 

employer as required under the rules explained earlier, 

add the following tips to the amount in box 1 of your Form 

W-2.

• Cash and charge tips you received that totaled less 

than $20 for any month.

• The value of noncash tips, such as tickets, passes, or 

other items of value.

Example. Ben Smith began working at the Blue 

Ocean Restaurant (his only employer in 2021) on June 30 

and received $10,000 in wages during the year. Ben kept 

a daily tip record showing that his tips for June were $18 

and his tips for the rest of the year totaled $7,000. He 

wasn’t required to report his June tips to his employer, but 

he reported all of the rest of his tips to his employer as required.

Ben's Form W-2 from Blue Ocean Restaurant shows 

$17,000 ($10,000 wages + $7,000 reported tips) in box 1. 

CAUTION

!

CAUTION

!

Publication 531 (2021) Page 5
He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return.

Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. If you received $20 or more in 

cash and charge tips in a month from any one job and 

didn’t report all of those tips to your employer, you must 

report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your 

return. To report these taxes, you must file Form 1040, 

Form 1040-SR, Form 1040-NR, Form 1040-PR, or Form 

1040-SS even if you won’t otherwise have to file.

Use Form 4137, Social Security and Medicare Tax on 

Unreported Tip Income, to figure social security and Medicare taxes and/or Form 8959, Additional Medicare Tax, to 

figure Additional Medicare Tax. Enter the tax(es) on your 

return as instructed, and attach the completed Form 4137 

and/or Form 8959 to your return.

If you’re subject to the Railroad Retirement Tax 

Act, you can't use Form 4137 to pay railroad retirement tax on unreported tips. To get railroad retirement credit, you must report tips to your employer.

Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips 

reported to your employer. You may have uncollected 

taxes if your regular pay wasn’t enough for your employer 

to withhold all the taxes you owe and you didn’t give your 

employer enough money to pay the rest of the taxes. For 

more information, see Giving your employer money for 

taxes under Reporting Tips to Your Employer, earlier.

If your employer couldn’t collect all the social security, 

Medicare, and Additional Medicare taxes, or railroad retirement taxes you owe on tips reported for 2021, the uncollected taxes will be shown in box 12 of your Form W-2 

(codes A and B). You must report these amounts as additional tax on your return.

If you worked in the U.S. possessions and received 

Form W-2AS, W-2CM, W-2GU, or W-2VI, any uncollected 

taxes on tips will be shown in box 12 with codes A and B. 

If you received Form 499R-2/W-2PR, any uncollected 

taxes will be shown in boxes 25 and 26. Unlike the uncollected portion of the regular (1.45%) Medicare tax, the uncollected Additional Medicare Tax isn't reported on Form 

W-2. To report these uncollected taxes, you must file 

Form 1040-NR, Form 1040-PR, or Form 1040-SS even if 

you wouldn’t otherwise have to file. You can report these 

taxes on Schedule 2 (Form 1040), line 8c, if you file Form 

1040-NR. If you file Form 1040-PR or Form 1040-SS, see 

the instructions for those forms.

Self-employed persons. If you receive tips as a self-employed person, you should report these tips as income on 

Schedule C. See Pub. 334, Tax Guide for Small Business, 

for more information on reporting business income.

CAUTION

!

Allocated Tips

If your employer allocated tips to you, they’re shown separately in box 8 of your Form W-2. They’re not included in 

box 1 with your wages and reported tips. If box 8 is blank, 

this discussion doesn't apply to you.

What are allocated tips? These are tips that your employer assigned to you in addition to the tips you reported 

to your employer for the year. Your employer will have 

done this only if:

• You worked in an establishment (restaurant, cocktail 

lounge, or similar business) that must allocate tips to 

employees, and

• The tips you reported to your employer were less than 

your share of 8% of food and drink sales.

No income, social security, Medicare, Additional Medicare, or railroad retirement taxes are withheld on allocated 

tips.

How were your allocated tips figured? The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an 

approved lower rate) of food and drink sales (other than 

carryout sales and sales with a service charge of 10% or 

more). Your share of that amount was figured using either 

a method provided by an employer-employee agreement 

or a method provided by IRS regulations based on employees' sales or hours worked. For information about the 

exact allocation method used, ask your employer.

Must you report your allocated tips on your tax return? You must report tips you received in 2021 (including both cash and noncash tips) on your tax return as explained in What tips to report, earlier. Any tips you 

reported to your employer in 2021 as required (explained 

under Reporting Tips to Your Employer, earlier) are included in the wages shown in box 1 of your Form W-2. Add 

to the amount in box 1 only the tips you didn’t report to 

your employer as required. This should include any allocated tips shown in box 8 on your Form(s) W-2, unless 

you have adequate records to show that you received less 

tips in the year than the allocated amount.

See What tips to report under Reporting Tips on Your 

Tax Return, and Keeping a Daily Tip Record, earlier.

How to report allocated tips. If you received any tips in 

2021 that you didn’t report to your employer as required 

(including allocated tips that you are required to report on 

your tax return), add these tips to the amount in box 1 of 

your Form(s) W-2 and report this amount as wages on 

Form 1040 or 1040-SR, line 1; or Form 1040-NR, line 1a.

Because social security, Medicare, or Additional Medicare taxes weren’t withheld from the allocated tips, you 

must report those taxes as additional tax on your return. 

Complete Form 4137 and include the allocated tips on 

line 1 of the form as provided in its instructions. See Reporting social security, Medicare, Additional Medicare, or 

railroad retirement taxes on tips not reported to your 

Page 6 Publication 531 (2021)
employer under Reporting Tips on Your Tax Return, earlier.

How to request an approved lower rate. Your employer can use a tip rate lower than 8% (but not lower than 

2%) to figure allocated tips only if the IRS approves the 

lower rate. Either the employer or the employees can request approval of a lower rate by filing a petition with the 

IRS. The petition must include specific information about 

the establishment that will justify the lower rate. A user fee 

must be paid with the petition.

An employee petition can be filed only with the consent 

of a majority of the directly tipped employees (waiters, 

bartenders, and others who receive tips directly from customers). The petition must state the total number of directly tipped employees and the number of employees 

consenting to the petition. Employees filing the petition 

must promptly notify the employer, and the employer must 

promptly give the IRS a copy of all Forms 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, filed for the establishment for the previous 3 

years.

For more information about how to file a petition and 

what information to include, see Allocation of Tips in the 

Instructions for Form 8027.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, 

forms, or instructions, go to IRS.gov to find resources that 

can help you right away.

Preparing and filing your tax return. After receiving all 

your wage and earnings statements (Forms W-2, W-2G, 

1099-R, 1099-MISC, 1099-NEC, etc.); unemployment 

compensation statements (by mail or in a digital format) or 

other government payment statements (Form 1099-G); 

and interest, dividend, and retirement statements from 

banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you 

qualify for free tax preparation, or hire a tax professional to 

prepare your return.

For 2021, if you received an Economic Impact 

Payment (EIP), refer to your Notice 1444-C, Your 

2021 Economic Impact Payment. If you received 

Advance Child Tax Credit payments, refer to your Letter 

6419.

Free options for tax preparation. Go to IRS.gov to see 

your options for preparing and filing your return online or 

in your local community, if you qualify, which include the 

following.

• Free File. This program lets you prepare and file your 

federal individual income tax return for free using 

brand-name tax-preparation-and-filing software or 

Free File fillable forms. However, state tax preparation 

may not be available through Free File. Go to IRS.gov/

CAUTION

!

FreeFile to see if you qualify for free online federal tax 

preparation, e-filing, and direct deposit or payment options.

• VITA. The Volunteer Income Tax Assistance (VITA) 

program offers free tax help to people with 

low-to-moderate incomes, persons with disabilities, 

and limited-English-speaking taxpayers who need 

help preparing their own tax returns. Go to IRS.gov/

VITA, download the free IRS2Go app, or call 

800-906-9887 for information on free tax return preparation.

• TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly 

those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. 

Go to IRS.gov/TCE, download the free IRS2Go app, 

or call 888-227-7669 for information on free tax return 

preparation.

• MilTax. Members of the U.S. Armed Forces and 

qualified veterans may use MilTax, a free tax service 

offered by the Department of Defense through Military 

OneSource. For more information, go to 

MilitaryOneSource (MilitaryOneSource.mil/Tax).

Also, the IRS offers Free Fillable Forms, which can 

be completed online and then filed electronically regardless of income.

Using online tools to help prepare your return. Go to 

IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant (IRS.gov/

EITCAssistant) determines if you’re eligible for the 

earned income credit (EIC).

• The Online EIN Application (IRS.gov/EIN) helps you 

get an employer identification number (EIN) at no 

cost.

• The Tax Withholding Estimator (IRS.gov/W4app) 

makes it easier for everyone to pay the correct amount 

of tax during the year. The tool is a convenient, online 

way to check and tailor your withholding. It’s more 

user-friendly for taxpayers, including retirees and 

self-employed individuals. The features include the 

following.

▶ Easy to understand language.

▶ The ability to switch between screens, correct 

previous entries, and skip screens that don’t apply.

▶ Tips and links to help you determine if you qualify 

for tax credits and deductions.

▶ A progress tracker.

▶ A self-employment tax feature.

▶ Automatic calculation of taxable social security 

benefits.

• The First-Time Homebuyer Credit Account Look-up 

(IRS.gov/HomeBuyer) tool provides information on 

your repayments and account balance.

• The Sales Tax Deduction Calculator (IRS.gov/

SalesTax) figures the amount you can claim if you 

itemize deductions on Schedule A (Form 1040).

Publication 531 (2021) Page 7
Getting answers to your tax questions. On 

IRS.gov, you can get up-to-date information on 

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that 

will ask you questions, and based on your input, provide answers on a number of tax law topics.

• IRS.gov/Forms: Find forms, instructions, and publications. You will find details on 2021 tax changes and 

hundreds of interactive links to help you find answers 

to your questions.

• You may also be able to access tax law information in 

your electronic filing software.

Need someone to prepare your tax return? There are 

various types of tax return preparers, including tax preparers, enrolled agents, certified public accountants (CPAs), 

attorneys, and many others who don’t have professional 

credentials. If you choose to have someone prepare your 

tax return, choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification 

number (PTIN).

Although the tax preparer always signs the return, 

you’re ultimately responsible for providing all the information required for the preparer to accurately prepare your 

return. Anyone paid to prepare tax returns for others 

should have a thorough understanding of tax matters. For 

more information on how to chose a tax preparer, go to 

Tips for Choosing a Tax Preparer on IRS.gov.

Advance child tax credit payments. From July through 

December 2021, advance payments were sent automatically to taxpayers with qualifying children who met certain 

criteria. The advance child tax credit payments were early 

payments of up to 50% of the estimated child tax credit 

that taxpayers may properly claim on their 2021 returns. 

Go to IRS.gov/AdvCTC for more information about these 

payments and how they can affect your taxes.

Coronavirus. Go to IRS.gov/Coronavirus for links to information on the impact of the coronavirus, as well as tax 

relief available for individuals and families, small and large 

businesses, and tax-exempt organizations.

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure 

online W-2 filing options to CPAs, accountants, enrolled 

agents, and individuals who process Form W-2, Wage 

and Tax Statement, and Form W-2c, Corrected Wage and 

Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the 

various social media tools the IRS uses to share the latest 

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are 

our highest priority. We use these tools to share public information with you. Don’t post your social security number 

(SSN) or other confidential information on social media 

sites. Always protect your identity when using any social 

networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, 

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations 

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can 

find information on IRS.gov/MyLanguage if English isn’t 

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The 

IRS is committed to serving our multilingual customers by 

offering OPI Services. The OPI service is a federally funded program and is available at Taxpayer Assistance 

Centers (TACs), other IRS offices, and every VITA/TCE 

return site. The OPI Service is accessible in more than 

350 languages.

Accessibility Helpline available for taxpayers with 

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and 

future accessibility products and services available in alternative media formats (for example, braille, large print, 

audio, etc.).

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all of the forms, instructions, and publications you may need. Or, you can go to 

IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook 

format. You can also download and view popular tax 

publications and instructions (including the Instructions for 

Form 1040) on mobile devices as eBooks at IRS.gov/

eBooks.

Note. IRS eBooks have been tested using Apple's 

iBooks for iPad. Our eBooks haven’t been tested on other 

dedicated eBook readers, and eBook functionality may 

not operate as intended.

Access your online account (individual taxpayers 

only). Go to IRS.gov/Account to securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax 

year.

Page 8 Publication 531 (2021)
• See payment plan details or apply for a new payment 

plan.

• Make a payment or view 5 years of payment history 

and any pending or scheduled payments.

• Access your tax records, including key data from your 

most recent tax return, your EIP amounts, and transcripts.

• View digital copies of select notices from the IRS.

• Approve or reject authorization requests from tax professionals.

• View your address on file or manage your communication preferences.

Tax Pro Account. This tool lets your tax professional 

submit an authorization request to access your individual 

taxpayer IRS online account. For more information, go to 

IRS.gov/TaxProAccount.

Using direct deposit. The fastest way to receive a tax 

refund is to file electronically and choose direct deposit 

which securely and electronically transfers your refund directly into your financial account. Direct deposit also 

avoids the possibility that your check could be lost, stolen, 

or returned undeliverable to the IRS. Eight in 10 taxpayers 

use direct deposit to receive their refunds. If you don’t 

have a bank account, go to IRS.gov/DirectDeposit for 

more information on where to find a bank or credit union 

that can open an account online.

Getting a transcript of your return. The quickest way 

to get a copy of your tax transcript is to go to IRS.gov/

Transcripts. Click on either “Get Transcript Online” or “Get 

Transcript by Mail” to order a free copy of your transcript. 

If you prefer, you can order your transcript by calling 

800-908-9946.

Reporting and resolving your tax-related identity 

theft issues. 

• Tax-related identity theft happens when someone 

steals your personal information to commit tax fraud. 

Your taxes can be affected if your SSN is used to file a 

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by 

email, text messages, telephone calls, or social media 

channels to request personal or financial information. 

This includes requests for personal identification numbers (PINs), passwords, or similar information for 

credit cards, banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft 

Central webpage, for information on identity theft and 

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of tax-related 

identity theft, you can learn what steps you should 

take.

• Get an Identity Protection PIN (IP PIN). IP PINs are 

six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your 

SSN. To learn more, go to IRS.gov/IPPIN.

Ways to check on the status of your refund. 

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your mobile device to check your refund status.

• Call the automated refund hotline at 800-829-1954.

Note. The IRS can’t issue refunds before mid-February 2022 for returns that claimed the EIC or the additional 

child tax credit (ACTC). This applies to the entire refund, 

not just the portion associated with these credits.

Making a tax payment. Go to IRS.gov/Payments for information on how to make a payment using any of the following options.

• IRS Direct Pay: Pay your individual tax bill or estimated tax payment directly from your checking or savings account at no cost to you.

• Debit or Credit Card: Choose an approved payment 

processor to pay online or by phone.

• Electronic Funds Withdrawal: Schedule a payment 

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: Best option 

for businesses. Enrollment is required.

• Check or Money Order: Mail your payment to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes with cash at 

a participating retail store.

• Same-Day Wire: You may be able to do same-day 

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to 

ensure that the electronic payments you make online, by 

phone, or from a mobile device using the IRS2Go app are 

safe and secure. Paying electronically is quick, easy, and 

faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/Payments for 

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once 

you complete the online process, you will receive immediate notification of whether your agreement has 

been approved.

• Use the Offer in Compromise Pre-Qualifier to see if 

you can settle your tax debt for less than the full 

amount you owe. For more information on the Offer in 

Compromise program, go to IRS.gov/OIC.

Filing an amended return. You can now file Form 

1040-X electronically with tax filing software to amend 

2019 or 2020 Forms 1040 and 1040-SR. To do so, you 

Publication 531 (2021) Page 9
must have e-filed your original 2019 or 2020 return. Amended returns for all prior years must be mailed. Go to 

IRS.gov/Form1040X for information and updates.

Checking the status of an amended return. Go to 

IRS.gov/WMAR to track the status of Form 1040-X amended returns.

Note. It can take up to 3 weeks from the date you filed 

your amended return for it to show up in our system, and 

processing it can take up to 16 weeks.

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

You can use Schedule LEP, Request for Change in 

Language Preference, to state a preference to receive notices, letters, or other written communications from the 

IRS in an alternative language, when these are available. 

Once your Schedule LEP is processed, the IRS will determine your translation needs and provide you translations 

when available. If you have a disability requiring notices in 

an accessible format, see Form 9000.

Contacting your local IRS office. Keep in mind, many 

questions can be answered on IRS.gov without visiting an 

IRS TAC. Go to IRS.gov/LetUsHelp for the topics people 

ask about most. If you still need help, IRS TACs provide 

tax help when a tax issue can’t be handled online or by 

phone. All TACs now provide service by appointment, so 

you’ll know in advance that you can get the service you 

need without long wait times. Before you visit, go to 

IRS.gov/TACLocator to find the nearest TAC and to check 

hours, available services, and appointment options. Or, 

on the IRS2Go app, under the Stay Connected tab, 

choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) 

Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that 

helps taxpayers and protects taxpayer rights. Their job is 

to ensure that every taxpayer is treated fairly and that you 

know and understand your rights under the Taxpayer Bill 

of Rights.

How Can You Learn About Your Taxpayer 

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that 

all taxpayers have when dealing with the IRS. Go to 

TaxpayerAdvocate.IRS.gov to help you understand what 

these rights mean to you and how they apply. These are 

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve 

with the IRS. And their service is free. If you qualify for 

their assistance, you will be assigned to one advocate 

who will work with you throughout the process and will do 

everything possible to resolve your issue. TAS can help 

you if:

• Your problem is causing financial difficulty for you, 

your family, or your business;

• You face (or your business is facing) an immediate 

threat of adverse action; or

• You’ve tried repeatedly to contact the IRS but no one 

has responded, or the IRS hasn’t responded by the 

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, 

and Puerto Rico. Your local advocate’s number is in your 

local directory and at TaxpayerAdvocate.IRS.gov/

Contact-Us. You can also call them at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect 

many taxpayers. If you know of one of these broad issues, 

report it to them at IRS.gov/SAMS.

TAS for Tax Professionals

TAS can provide a variety of information for tax professionals, including tax law updates and guidance, TAS programs, and ways to let TAS know about systemic problems you’ve seen in your practice.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent individuals whose income is below a certain level and need 

to resolve tax problems with the IRS, such as audits, appeals, and tax collection disputes. In addition, LITCs can 

provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or 

a small fee for eligible taxpayers. To find an LITC near 

you, go to TaxpayerAdvocate.IRS.gov/about-us/LowIncome-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low 

Income Taxpayer Clinic List.

Page 10 Publication 531 (2021)
To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Additional Medicare Tax 1

Allocated tips 6

Assistance (See Tax help)

C

Cash tips 2

Credit card charge tips 2

D

Daily tip record 2

E

Electronic tip record 3

Electronic tip statement 4

Employers:

Giving money to, for taxes 4

Reporting tips to 3

F

Figures:

Form 4070-A, sample filled-in 3

Form 1040 or 1040-SR:

Schedule C 6

Unreported tips 6

Form 4070 3

Sample filled-in 4

Form 4070-A 2

Form 4137 6

Form 8027 7

Form W-2:

Uncollected taxes 5, 6

G

Gaming Industry Tip Compliance 

Agreement Program 5

N

Noncash tips 2

P

Penalties:

Failure to report tips to employer 4

Underpayment of estimated 

taxes 5

Publications (See Tax help)

R

Recordkeeping requirements:

Daily tip record 2

Reporting:

Employee to report tips to 

employer 3

Tip income 2

S

Self-employed persons 6

Service charge paid as wages 3

Social security and Medicare taxes:

Allocated tips 6

Reporting of earnings to Social 

Security Administration 3

Tips not reported to employer 6

Uncollected taxes on tips 6

T

Tax help 7

Tax returns 5

Tip pools 2

Tip Rate Determination and 

Education Program 5

Tip splitting 2

U

Uncollected taxes 5, 6

W

Withholding 3

Publication 531 (2021) Page 11