Breaking Down IRS Form 4070A | Complete Payroll

There can be a lot of anxiety involved when it comes to filling out paperwork for the Internal Revenue Service (IRS). But when it comes to filling out Form 4070, the name of the game is making sure you keep careful daily records for sufficient proof should you need it down the road. 

In this article, we will give you step-by-step instructions on how to fill out Form 4070A, the companion to Form 4070 to help clear up any confusion in the process to ensure accurate reporting. 

What Are IRS Forms 4070 and 4070A?

Also known as “Employee’s Report of Tips to Employer,” Form 4070 is a form from the IRS where employees are required to report any gratuities they receive on the job to their employer. These tips may include cash from customers, proceeds from a tip-sharing program, or any tips received in the form of a credit or debit card. 

This form is for employers so they know how much to withhold for taxes on regular paychecks and what amount to report to the Social Security Administration. 

Form 4070 is required for any employee who earns over $20 a month in tips. The form must be submitted by the 10th of the following month. To help keep track of all gratuities, employees are encouraged to fill out Form 4070A, which is provided for the employee’s convenience. 

How to Complete Form 4070A

This form is strictly voluntary, but it can help keep things straight so you get an accurate total each month. This form allows you to record your daily tips to make the summary easier to complete. 

To complete this form accurately, follow these simple steps:

1. In Column A, “Tips Received Directly from Customers and Other Employees,” enter the amount of tips you have received IN CASH from customers or other employees as part of a tip-sharing program.
2. In Column B, “Credit and Debit Card Tips Received,” enter the amount of tips you have received in the form of a credit or debit card.
3. In Column C, “Tips Paid Out to Other Employees,” enter the amount of tips you have paid other employees through tip-sharing programs or other arrangements.
4. In Column D, “Names of Employees to Whom You Paid Tips,” list the names of all employees you paid tips to as recorded in Column C.
5. Calculate the subtotal for every page of the form.
6. After all daily records for the month are completed, calculate the totals and transfer these numbers to Form 4070. 

If you fail to report your tips to your employer, there could be a penalty. That penalty could be up to 50% of the Social Security and Medicare taxes that are due on the unreported tips. The only way to get out of such a penalty would be to prove there is reasonable cause for not reporting tips.

Looking for more step-by-step directions on filling out important forms like this? Need access to hundreds of HR and Payroll related articles to keep you fresh and current in your position? Check out Complete Payroll’s blog page to access up-to-date information on all things HR.