• FICA Tips TC Pre-Interview- Initial Survey

  • NOTE: You can save and continue this form multiple times, but you must hit "Save and continue" bottom of each section.

    If you do not have an account with Jotform, you will need to click on the “Skip Create an Account" link to be able to get the session link and come back later.

  • Before You Begin - Please Read It This Completely

    This survey aims to gather the initial information to determine the easiest and quickest path to qualification under the FICA Tips Tax Credit program.

     

    The FICA Tip Credit (IRS Code Section 45B) is a dollar-for-dollar tax credit that allows eligible businesses to recover the 6.2% employers for the FICA taxes (Social Security and Medicare) paid on employee tips above the federal minimum wage.
     
    The regulations clarify that the credit is available only for employer FICA taxes paid after December 31, 1993, on tips received for services performed after December 31, 1993.
     
    Tip credits generally apply only to qualifying employees working in specific industries who receive more than $30 monthly in tips. The Department of Labor also specifies that employers can only apply tip credits to hours spent performing tip-producing work. When workers split shifts between tipped and non-tipped work, employers are responsible for the full minimum wage for the non-tipped hours.

    The FICA Tip Credit is a tax credit available to food and beverage establishments and after 12/31/2024, those in the beauty and personal care industries, that allows them to claim a credit against their federal income taxes for the employer’s share of FICA taxes (Social Security and Medicare taxes) paid on employee tips. The credit specifically applies to tips that exceed the amount needed to bring an employee’s wages up to the federal minimum wage rate of $5.15 per hour (the rate used for this credit). 

    For the Beauty and Personal Care Industry, the federal minimum wage rate was established at $7.25 per hour starting 01/01/2025

    The Fair Labor Standards Act (FLSA) designed the tip credit to help restaurants, bars, hotels, salons, and other types of businesses that rely on tipped employees to cut payroll costs but tightly controls how they can apply it.  Where a worker’s combined cash wage and gratuity don’t add up to at least the state minimum wage, the employer needs to pay the remainder. Businesses also can’t apply tip credits to service charges, as these are considered part of the business’s income and not the employee’s earned wages.


    Before this credit existed, only about 15% of tips were even reported. Now, it not only promotes transparency but gives employers like you a chance to recover thousands in overpaid payroll taxes, without changing how you operate.

     

  • Should the address above be used for the amending of your tax returns.*
  • Should the address above be used for future correspondence with your company?*
  • Format: (000) 000-0000.
  • Format: (000) 000-0000.
  • Do you have another person you would like to add to your secure portal to help gather information?
  • What is the business Start Date?*
     - -
  • Does your business have any known tax compliance issues?*
  • Does your business or you personally have any tax liens or outstanding tax liabilities either to the IRS or a tax liability that could be a treasury offset for your business or you (i.e. state tax debt, social services debt, or federal student loan debt?*
  • Have you previously filed and RECEIVED an FICA Tips Tax Credit Refund for this business? If yes, please list the Year(s) and include a copy of ALL previous tax returns in the section for the upload of previous tax returns.*
  • In what states do you operate your business? Choose all that applies*
  • Has your company already applied for the FICA Tips Tax Credit?*
  • If yes to the question above, do you feel that your company did not FULLY take advantage of the available credits and would like a second opinion?*
  • How is your business structured for tax?*
  • What is your personal filing status?*
  • Which industry is your company in?*

  • TIP POOLING

    For the IRS FICA Tips Tax Credit (Form 8846), tip pooling involves combining tips from employees (like servers, bartenders) and redistributing them, but employers can only claim the credit on tips for employees who customarily receive tips, and tips used to pay a lower cash wage (below minimum wage) aren't eligible; employers must pay the full federal minimum wage if including non-tipped staff (like cooks) in the pool, and managers/supervisors can't participate. 

     

    Key IRS/FLSA Rules for Tip Pooling & FICA Credit:

    Eligible Participants (Traditional Pool): Only employees who "customarily and regularly" receive tips (e.g., servers, bussers, bartenders) can be in a mandatory tip pool when an employer takes the tip credit.
    Non-Traditional Pools: If an employer pays all employees the full federal minimum wage (no tip credit taken), they can include non-tipped workers (like cooks, dishwashers) in the pool.
    No Manager Participation: Managers, supervisors, or owners are prohibited from participating in any tip pool.
    Credit Ineligibility: The FICA Tip Credit is not allowed for tips that an employer uses to meet the federal minimum wage requirement for tipped employees.
    Reporting: Tips in the pool are still considered employee income, reported, and subject to FICA taxes; the credit offsets the employer's share of these taxes
     

    Tip pooling and the FICA Tip Tax Credit are related but distinct concepts under federal law. Tip pooling governs how employees share gratuities, while the FICA Tip Tax Credit (Section 45B) provides a financial incentive for employers to report those tips accurately. 

     

    1. Tip Pooling (FLSA Rules)

    Tip pooling is a practice where employees combine a portion of their tips to be redistributed among staff. 

    Mandatory Pooling: Employers can require employees to participate in a tip pool, but they must follow strict Fair Labor Standards Act (FLSA) guidelines.
    Participant Rules:

    If an employer takes a tip credit (pays less than $7.25/hr), the pool can only include "customarily and regularly" tipped employees, such as servers and bartenders.

    If an employer pays the full minimum wage ($7.25/hr or more), they may include "back-of-house" staff like cooks or dishwashers in the pool.
    Prohibition: Managers, supervisors, and owners can never participate in or keep any portion of a tip pool. 

     

    2. FICA Tip Tax Credit (IRS Section 45B) 

    The FICA Tip Tax Credit allows businesses in the food and beverage and beauty/wellness industries to claim a dollar-for-dollar credit for the Social Security and Medicare taxes they pay on employee tips. 

     

    3. Interaction Between the Two

    Impact of Pooling on Credit: A tip pooling arrangement can change the amount an employer is eligible to claim because it redistributes the tip income across multiple employees.


    Reporting Requirements: For an employer to claim the FICA credit, all tips—including those distributed through a pool—must be accurately reported to the employer by the employees.


    Compliance Risk: Failing to follow tip pooling regulations (e.g., allowing a manager to join the pool) can disqualify an employer from claiming the FICA Tip Tax Credit. 
    Summary of 2025-2026 Updates

  • Do you do any tip pooling with your tipped employees*
  • If you are pooling employees who would not traditionally receive a tip, are your records accurate enough to track the tips to only employees who qualify for the FICA Tips Tax Credit (those employees who traditionally receive a direct tip)?
  • In addition to the FICA Tips Tax review, if we can identify other tax-saving opportunities relevant to your situation, would you like us to make them available to you?

  • Additional Savings Opportunities

  • The questions below are designed to determine if you are missing other savings opportunities.  Should we determine there are other savings opportunities, your representative will reach out to discuss them.  Many of the below are also amenable and would be additional savings in excess of the FICA Tips Tax Credit.

  • Do you offer healthcare to your employees and/or incur health costs?
  • Are you frustrated with the plans costs relative to claims?
  • Are your unsure of the exact annual cost per employee?
  • Would your company benefit from a fixed budget plan?
  • If you have fewer than 10 Full-Time Equivalent employees, are you taking advantage of the Small Business Healthcare Tax Credit to reduce your employer-paid health insurance premiums by 50%?
  • Do you own the commercial building that the business operates out of?
  • Has your business utilized the tax savings benefits of a Cost Segregation Study?
  • During the last three tax years, has your restaurant spent time or money developing new menu items, improving food production processes, creating proprietary recipes, testing new equipment or techniques, or developing/customizing technology systems through trial and error? (Amendable for up to three years) Examples: Conduct market research to identify emerging food trends and customer preferences. Experiment with new recipes and menu items through small-scale testing. Implement technology solutions for inventory management and order processing. Explore sustainable sourcing options to reduce environmental impact.Gather customer feedback regularly to refine offerings and service.Collaborate with culinary schools for fresh ideas and talent.
  • Has your business done an analysis of the proper Accounting Method to determine the timing of revenue, expenses, and treatment of inventory and fixed assets for tax purposes are the most appropriate accounting method?
  • Has your business conducted a fixed assets vs expensing & repairs vs capital improvements study? (Amendable for up to three years)
  • Has your business done an Entity Structuring Review to determine if your legal obligations, tax burdens, financial operations, strategic planning, and operational processes are in line with your current operations? (Potentially amendable for up to three years)
  • Did your restaurant purchase imported goods that were subject to U.S. tariffs between 2018 and the present, either directly or through your supply chain?
  • Are you using a digital, automated Work Opportunity Tax Credit (WOTC) screening process to maximize the up to $9,600 federal tax credit and potentially state credits for each qualified employee (Amendable for up to three years)?
  • If your business operates out of New York and you hire New York youth, are you taking advantage of the New York Youth Jobs Program Tax Credit (NYYJPTC) for up to $7,500 per eligible employee?
  • Is your business located in a Federally Designated Empowerment Zone (Parts of Los Angeles, New York City, Chicago, Detroit, Atlanta, Baltimore, Philadelphia, and certain rural counties in states like Florida, Texas, Kentucky, and Mississippi) offering a maximum of $3,000 per employee (Amendable for up to three years)?
  • If this a test submission, please indicate below*
  • Should be Empty: