Form 8846

Department of the Treasury 

Internal Revenue Service

Credit for Employer Social Security and Medicare Taxes 

Paid on Certain Employee Tips

▶ Attach to your tax return.

▶ Go to www.irs.gov/Form8846 for the latest information.

OMB No. 1545-0123

2019

Attachment 

Sequence No. 98

Name(s) shown on return Identifying number

Note: Claim this credit only for employer social security and Medicare taxes paid by a food or beverage establishment 

where tipping is customary for providing food or beverages. See the instructions for line 1.

1 Tips received by employees for services on which you paid or incurred employer social 

security and Medicare taxes during the tax year (see instructions) . . . . . . . . . . 1 

2 Tips not subject to the credit provisions (see instructions) . . . . . . . . . . . . . 2 

3 Creditable tips. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . 3 

4 Multiply line 3 by 7.65% (0.0765). If you had any tipped employees whose wages (including 

tips) exceeded $132,900, see instructions and check here . . . . . . . . . . ▶ 4 

5 Credit for employer social security and Medicare taxes paid on certain employee tips from 

partnerships and S corporations . . . . . . . . . . . . . . . . . . . . . . 5 

6 Add lines 4 and 5. Partnerships and S corporations, report this amount on Schedule K. All 

others, report this amount on Form 3800, Part III, line 4f . . . . . . . . . . . . . 6 

For Paperwork Reduction Act Notice, see instructions. Cat. No. 16148Z Form 8846 (2019)
Form 8846 (2019) Page 2

General Instructions

Section references are to the Internal 

Revenue Code unless otherwise noted.

Future Developments

For the latest information about 

developments related to Form 8846 

and its instructions, such as legislation 

enacted after they were published, go 

to www.irs.gov/Form8846.

Purpose of Form

Certain food and beverage 

establishments (see Who Should File

below) use Form 8846 to claim a credit 

for social security and Medicare taxes 

paid or incurred by the employer on 

certain employees’ tips. The credit is 

part of the general business credit.

You can claim or elect not to claim 

the credit any time within 3 years from 

the due date of your return on either 

your original return or on an amended 

return.

Partnerships and S corporations 

must file this form to claim the credit. 

All other taxpayers are not required to 

complete or file this form if their only 

source for this credit is a partnership or 

S corporation. Instead, they can report 

this credit directly on line 4f in Part III 

of Form 3800, General Business Credit.

For information regarding taxes 

imposed on tips, including information 

on the difference between tips and 

service charges, see Rev. Rul. 

2012-18, 2012-26 I.R.B. at www.irs.

gov/irb/2012-26_IRB#RR-2012-18.

Who Should File

File Form 8846 if you meet both of the 

following conditions.

1. You had employees who received 

tips from customers for providing, 

delivering, or serving food or 

beverages for consumption if tipping 

of employees for delivering or serving 

food or beverages is customary.

2. During the tax year, you paid or

incurred employer social security and

Medicare taxes on those tips.

How the Credit Is Figured

Generally, the credit equals the 

amount of employer social security 

and Medicare taxes paid or incurred 

by the employer on tips received by 

the employee. However, employers 

cannot claim the credit for taxes on 

any tips that are used to meet the 

federal minimum wage rate in effect on 

January 1, 2007, $5.15 an hour. 

Therefore, the amount of tips for any 

month that are used to figure the 

credit must be reduced by the amount 

by which the wages that would have 

been payable during that month at 

$5.15 an hour exceed the wages 

(excluding tips) paid by the employer 

during that month. 

For example, an employee worked 

100 hours and received $450 in tips 

for October 2019. The worker received 

$375 in wages (excluding tips) at the 

rate of $3.75 an hour. If the employee 

had been paid $5.15 an hour, the 

employee would have received wages, 

excluding tips, of $515. For credit 

purposes, the $450 in tips is reduced 

by $140 (the difference between $515 

and $375), and only $310 of the 

employee’s tips for October 2019 is 

taken into account.

A 0.9% Additional Medicare Tax 

applies to Medicare wages and tips. 

However, Additional Medicare Tax is 

only imposed on the employee. There 

is no employer share of Additional 

Medicare Tax. Thus, there is no effect 

on the credit for employer social 

security and Medicare taxes on certain 

employee tips.

Specific Instructions

Figure the current year credit from your 

trade or business on lines 1 through 4.

Line 1

Enter the tips received by employees 

for services on which you paid or 

incurred employer social security and 

Medicare taxes during the tax year.

Include tips received from customers 

for providing, delivering, or serving food 

or beverages for consumption if tipping 

of employees for delivering or serving 

food or beverages is customary.

Line 2

If you pay each tipped employee 

wages (excluding tips) equal to or more 

than $5.15 an hour, enter zero on line 2.

Figure the amount of tips included on 

line 1 that are not creditable for each 

employee on a monthly basis. This is 

the total amount that would be payable 

to the employee at $5.15 an hour 

reduced by the wages (excluding tips) 

actually paid to the employee during 

the month. Enter on line 2 the total 

amounts figured for all employees.

Line 4

If any tipped employee’s wages and 

tips exceeded the 2019 social security 

tax wage base of $132,900 subject to 

the 6.2% rate, check the box on line 4 

and attach a separate computation 

showing the amount of tips subject to 

only the Medicare tax rate of 1.45%. 

Subtract these tips from the line 3 tips, 

and multiply the difference by 0.0765. 

Then, multiply the tips subject only to 

the Medicare tax by 0.0145. Enter the 

sum of these amounts on line 4. 

Reduce the income tax deduction for 

employer social security and Medicare 

taxes by the amount on line 4.

Fiscal year taxpayers. If you have an 

employee with wages and tips paid in 

2020 that exceeded the 2020 social 

security wage base of $137,700 by the 

end of the 2019 fiscal year, follow the 

Line 4 instructions above to determine 

the amount to enter on that line. The 

determination whether the tipped 

employee’s wages exceeds the social 

security wage base is made for each 

calendar year.

Paperwork Reduction Act Notice. 

We ask for the information on this form 

to carry out the Internal Revenue laws 

of the United States. You are required 

to give us the information. We need it 

to ensure that you are complying with 

these laws and to allow us to figure 

and collect the right amount of tax.

You are not required to provide the 

information requested on a form that is 

subject to the Paperwork Reduction 

Act unless the form displays a valid 

OMB control number. Books or 

records relating to a form or its 

instructions must be retained as long 

as their contents may become material 

in the administration of any Internal 

Revenue law. Generally, tax returns 

and return information are confidential, 

as required by section 6103.

The time needed to complete and 

file this form will vary depending on 

individual circumstances. The 

estimated burden for individual and 

business taxpayers filing this form is 

approved under OMB control number 

1545-0074 and 1545-0123 and is 

included in the estimates shown in the 

instructions for their individual and 

business income tax return. 

If you have comments concerning 

the accuracy of these time estimates 

or suggestions for making this form 

simpler, we would be happy to hear 

from you. See the instructions for the 

tax return with which this form is filed.