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Form 8846 (2022) Page 2
General Instructions Therefore, the amount of tips for any tax wage base of $147,000 subject to
month that are used to figure the the 6.2% rate, check the box on line 4
Section references are to the Internal credit must be reduced by the amount and attach a separate computation
Revenue Code unless otherwise noted. by which the wages that would have showing the amount of tips subject to
Future Developments been payable during that month at only the Medicare tax rate of 1.45%.
For the latest information about $5.15 an hour exceed the wages Subtract these tips from the line 3 tips,
developments related to Form 8846 (excluding tips) paid by the employer and multiply the difference by 0.0765.
and its instructions, such as legislation during that month. Then, multiply the tips subject only to
enacted after they were published, go For example, an employee worked the Medicare tax by 0.0145. Enter the
to www.irs.gov/Form8846. 100 hours and received $450 in tips sum of these amounts on line 4.
for October 2022. The worker received Reduce the income tax deduction for
Purpose of Form $375 in wages (excluding tips) at the employer social security and Medicare
Certain food and beverage employers rate of $3.75 an hour. If the employee taxes by the amount on line 4.
(see Who Should File below) use Form had been paid $5.15 an hour, the Fiscal year taxpayers. If you have an
8846 to claim a credit for social employee would have received wages, employee with wages and tips paid in
security and Medicare taxes paid or excluding tips, of $515. For credit 2023 that exceeded the 2023 social
incurred by the employer on certain purposes, the $450 in tips is reduced security wage base of $160,200 by the
employees’ tips. The credit is part of by $140 (the difference between $515 end of the 2022 fiscal year, follow the
the general business credit. and $375), and only $310 of the Line 4 instructions above to determine
You can claim or elect not to claim employee’s tips for October 2022 is the amount to enter on that line. The
the credit any time within 3 years from taken into account. determination whether the tipped
the due date of your return on either A 0.9% Additional Medicare Tax employee’s wages exceeds the social
your original return or on an amended applies to Medicare wages and tips. security wage base is made for each
return. However, Additional Medicare Tax is calendar year.
Partnerships and S corporations only imposed on the employee. There
must file this form to claim the credit. is no employer share of Additional Paperwork Reduction Act Notice.
All other taxpayers are not required to Medicare Tax. Thus, there is no effect We ask for the information on this form
complete or file this form if their only on the credit for employer social to carry out the Internal Revenue laws
source for this credit is a partnership or security and Medicare taxes on certain of the United States. You are required
S corporation. Instead, they can report employee tips. to give us the information. We need it
this credit directly on line 4f in Part III to ensure that you are complying with
of Form 3800, General Business Credit. Specific Instructions these laws and to allow us to figure
For information regarding taxes Figure the current year credit from your and collect the right amount of tax.
imposed on tips, including information trade or business on lines 1 through 4. You are not required to provide the
on the difference between tips and Line 1 information requested on a form that is
subject to the Paperwork Reduction
service charges, see Rev. Rul. Enter the tips received by employees Act unless the form displays a valid
2012-18, 2012-26 I.R.B., at www.irs. for services on which you paid or OMB control number. Books or
gov/irb/2012-26_IRB#RR-2012-18. incurred employer social security and records relating to a form or its
Who Should File Medicare taxes during the tax year. instructions must be retained as long
File Form 8846 if you meet both of the Include tips received from customers as their contents may become material
following conditions. for providing, delivering, or serving food in the administration of any Internal
or beverages for consumption if tipping Revenue law. Generally, tax returns
1. You had employees who received of employees for delivering or serving and return information are confidential,
tips from customers for providing, food or beverages is customary. as required by section 6103.
delivering, or serving food or
beverages for consumption if tipping Line 2 The time needed to complete and
of employees for delivering or serving If you pay each tipped employee file this form will vary depending on
food or beverages is customary. wages (excluding tips) equal to or more individual circumstances. The
2. During the tax year, you paid or than $5.15 an hour, enter zero on line 2. estimated burden for individual and
incurred employer social security and Figure the amount of tips included on business taxpayers filing this form is
Medicare taxes on those tips. line 1 that are not creditable for each approved under OMB control number
employee on a monthly basis. This is 1545-0074 and 1545-0123 and is
How the Credit Is Figured the total amount that would be payable included in the estimates shown in the
Generally, the credit equals the to the employee at $5.15 an hour instructions for their individual and
amount of employer social security reduced by the wages (excluding tips) business income tax return.
and Medicare taxes paid or incurred actually paid to the employee during If you have comments concerning
by the employer on tips received by the month. Enter on line 2 the total the accuracy of these time estimates
the employee. However, employers amounts figured for all employees. or suggestions for making this form
cannot claim the credit for taxes on simpler, we would be happy to hear
any tips that are used to meet the Line 4
from you. See the instructions for the
federal minimum wage rate in effect on If any tipped employee’s wages and tax return with which this form is filed.
January 1, 2007, of $5.15 an hour. tips exceeded the 2022 social security
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