Federal PTIN Supplemental Application For Foreign Persons Without a Social Security Number

PTIN Supplemental Application For Foreign Persons Without a Social Security Number
2023 Form 8846
Form

8846

Department of the Treasury
Internal Revenue Service

Credit for Employer Social Security and Medicare Taxes
Paid on Certain Employee Tips

OMB No. 1545-0123

2023

Attach to your tax return.
Go to www.irs.gov/Form8846 for the latest information.

Attachment
Sequence No. 846

Identifying number

Name(s) shown on return

Note: Claim this credit only for employer social security and Medicare taxes paid by a food or beverage employer 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 $160,200, see instructions and check here . . . . . . . . . . .

4

Credit for employer social security and Medicare taxes paid on certain employee tips from
partnerships and S corporations . . . . . . . . . . . . . . . . . . . . . .

5

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

5
6

For Paperwork Reduction Act Notice, see instructions.

. . . . . . . . . . . . . . . . . .

Cat. No. 16148Z

Form 8846 (2023)

Page 2

Form 8846 (2023)

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 employers
(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, of $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 2023. 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 2023 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 2023 social security

tax wage base of $160,200 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
2024 that exceeded the 2024 social
security wage base of $168,600 by the
end of the 2023 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.