Form 8846 Credit for Employer Social Security and Medicare Taxes P

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I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8846, PAGE 1 OF 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: NONE
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Action

8846

Revised proofs
requested

CUMULATIVE CHANGES

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

Department of the Treasury
Internal Revenue Service

Name(s) shown on return

Signature

O.K. to print

APPROVED FOR TPCC CHAIRPERSON "AS CORRECTED" JOHNNY CERVANTES,
01/22/2009

Form

Date

OMB No. 1545-1414

2008

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Attachment
Sequence No.

Attach to your tax return.

98

Identifying number

Note. Claim this credit only for 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
4

Creditable tips. Subtract line 2 from line 1
Multiply line 3 by 7.65% (.0765). If you had any tipped employees whose wages (including tips)
©
exceeded $102,000, see instructions and check here
Credit for employer social security and Medicare taxes paid on certain employee tips from
partnerships and S corporations
Add lines 4 and 5. Partnerships and S corporations, report this amount on Schedule K; all
others, go to line 7

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5
6
7
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9
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Credit for employer social security and Medicare taxes paid on certain employee tips included
on line 6 from passive activities (see instructions)
Subtract line 7 from line 6
Credit for employer social security and Medicare taxes paid on certain employee tips allowed
for 2008 from passive activities (see instructions)
Carryforward of the credit for employer social security and Medicare taxes paid on certain
employee tips that originated in a tax year that began after 2006 (see instructions)
Carryback of the credit for employer social security and Medicare taxes paid on certain employee
tips from 2009 (see instructions)
Add lines 8 through 11. Report this amount on Form 3800, line 29f

General Instructions
Section references are to the
Internal Revenue Code.

2. During the tax year, you paid or
incurred employer social security and
Medicare taxes on those tips.

Purpose of Form

How the Credit Is Figured

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.

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, 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 2008. 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 2008 is taken into
account.

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.

For Paperwork Reduction Act Notice, see back of form.

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Specific Instructions
Part I. Current Year Credit
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

Cat. No. 16148Z

Form

8846

(2008)

7
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8846, PAGE 2 OF 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: NONE
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8846 (2008)

Page

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 2008 social security
tax wage base of $102,000 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 .0765.
Then, multiply the tips subject only to
the Medicare tax by .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.
Line 7
Enter the amount included on line 6
that is from a passive activity.
Generally, a passive activity is a trade
or business in which you did not
materially participate. Rental activities
are generally considered passive
activities, whether or not you materially
participate. For details, see Form
8582-CR, Passive Activity Credit
Limitations (for individuals, trusts, and
estates), or Form 8810, Corporate
Passive Activity Loss and Credit
Limitations (for corporations).

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Line 9
Enter the passive activity credit
allowed for the 2008 credit for
employer social security and
Medicare taxes paid on certain
employee tips from Form 8582-CR or
Form 8810.

Line 10
Use line 10 to show any carryforward
of the credit for employer social
security and Medicare taxes paid on
certain employee tips from 2007. For
carryforwards of the credit from
years prior to 2007, show such
carryforwards on line 6 of Form 3800.

Line 11
Use line 11 to show any carryback if
you amend your 2008 return to carry
back an unused credit from 2009.

Part II. Allowable Credit

The credit allowed for the current
year may be limited based on your
tax liability. Use Part II to figure the
allowable credit.

Line 13
Enter the regular tax before credits
from the following line of the
appropriate form or schedule.

● Corporations: Form 1120,
Schedule J, line 2; or the applicable
line of your return.
● Estates and trusts: The sum of the
amounts from Form 1041, Schedule
G, lines 1a and 1b; or the amount
from the applicable line of your
return.

Line 14

Enter the alternative minimum tax
(AMT) from the following line of the
appropriate form or schedule.
● Individuals: Form 6251, line 35.
● Corporations: Form 4626, line 14.
● Estates and trusts: Schedule I
(Form 1041), line 56.

Line 19
See section 38(c)(5) for special rules
that apply to married couples filing
separate returns, controlled corporate
groups, regulated investment
companies, real estate investment
trusts, and estates and trusts.
Line 23
If you cannot use all of the credit
because of the tax liability limit, carry
the unused credit back 1 year then
forward up to 20 years.

● Individuals: Form 1040, line 44;
Form 1040NR, line 41.

Line 16a
Enter the total amount claimed on the following lines of Form 1040 or 1040NR.

Personal Credits

2

2008 Form 1040, line:

2008 Form 1040NR, line:

Credit for child and dependent care expenses

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44

Credit for the elderly or the disabled

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N/A

Education credits

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N/A

Child tax credit

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Retirement savings contributions credit

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Mortgage interest credit

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Residential energy efficient property credit

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Credit for qualified adoption expenses

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Credit from Form 8859, District of Columbia first-time homebuyer credit

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