4137 Social Security and Medicare Tax on Unreported Tip Incom

Form

Department of the Treasury
Internal Revenue Service (99)

©
©

2008

See instructions below and on back.

Attachment
Sequence No.

Attach to Form 1040, Form 1040NR, Form 1040NR-EZ, Form 1040-SS, or Form 1040-PR.

Name of person who received tips. If married, complete a separate Form 4137 for each spouse with unreported tips.

1

OMB No. 1545-0074

Social Security and Medicare Tax
on Unreported Tip Income

4137

(a) Name of employer to whom
you were required to, but did not
report all your tips (see instructions)

(b) Employer
identification number
(see instructions)

(c) Total cash and charge
tips you received (including
unreported tips) (see instructions)

24

Social security number
(d) Total cash and charge
tips you reported to your
employer

A
B
C
D
E
2 Total cash and charge tips you received in 2008. Add the amounts
from line 1, column (c)

2

3 Total cash and charge tips you reported to your employer(s) in 2008. Add the amounts from line
1, column (d)

3

4 Subtract line 3 from line 2. This amount is income you must include in the total on Form 1040,
line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3

4

5 Cash and charge tips you received but did not report to your employer because the total was
less than $20 in a calendar month (see instructions)

5

6 Unreported tips subject to Medicare tax. Subtract line 5 from line 4

6

7 Maximum amount of wages (including tips) subject to social security
tax

7

8 Total social security wages and social security tips (total of boxes 3
and 7 shown on your Form(s) W-2) or railroad retirement (tier 1)
compensation

8

102,000 00

9 Subtract line 8 from line 7. If line 8 is more than line 7, enter -0- here and on line 10 and go to
line 12
10 Unreported tips subject to social security tax. Enter the smaller of line 6 or line 9. If you received
tips as a federal, state, or local government employee, (see instructions)
11 Multiply line 10 by .062 (social security tax rate)
12 Multiply line 6 by .0145 (Medicare tax rate)
13 Add lines 11 and 12. Enter the result here and on Form 1040, line 58; Form 1040NR, line 53; or
Form 1040NR-EZ, line 16

General Instructions
What’s new. For 2008, the maximum amount of wages
and tips subject to social security tax is $102,000.
Purpose of form. Use Form 4137 only to figure the
social security and Medicare tax owed on tips you did not
report to your employer, including any allocated tips
shown on your Form(s) W-2 that you must report as
income. You must also report the income on Form 1040,
line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3.
By filing this form, your social security and Medicare tips
will be credited to your social security record (used to
figure your benefits).
If you believe you are an employee and you
received Form 1099-MISC, Miscellaneous
Income, instead of Form W-2, Wage and Tax
CAUTION
Statement, because your employer did not
consider you an employee, do not use this form to report
For Paperwork Reduction Act Notice, see instructions on back.

9
10
11
12
13

the social security and Medicare taxes on that income.
Instead, use Form 8919, Uncollected Social Security and
Medicare Taxes on Wages.
Who must file. You must file Form 4137 if you received
cash and charge tips of $20 or more in a calendar month
and did not report all of those tips to your employer. You
must also file Form 4137 if box 8 of your Form(s) W-2
shows allocated tips that you must report as income.
Allocated tips. You must report as income on
Form 1040, line 7; Form 1040NR, line 8; or Form
1040NR-EZ, line 3, at least the amount of allocated tips
shown in box 8 of your Form(s) W-2 unless you can prove
a smaller amount with adequate records. If you have
records that show the actual amount of tips you received,
report that amount even if it is more or less than the
allocated tips. Although allocated tips are shown on your

Cat. No. 12626C

Form

4137

(2008)

Form 4137 (2008)

Form W-2, they are not included in the wages, tips, and
other compensation box (box 1) on that form and no
income tax, social security tax, or Medicare tax has been
withheld from these tips.
Tips you must report to your employer. You must give
your employer a written report of cash and charge tips if
you received $20 or more in tips during a month. If, in any
month, you worked for two or more employers and
received tips while working for each, the $20 rule applies
separately to the tips you received while working for each
employer and not to the total you received. You must
report your tips to your employers by the 10th day of the
month following the month you received them. If the 10th
day of the month falls on a Saturday, Sunday, or legal
holiday, give your employer the report by the next
business day.
Employees subject to the Railroad Retirement Tax Act.
Do not use Form 4137 to report tips received for work
covered by the Railroad Retirement Tax Act. In order to
get railroad retirement credit, you must report these tips
to your employer.
Payment of tax. Tips you reported to your employer are
subject to social security and Medicare tax (or railroad
retirement tax) and income tax withholding. Your employer
collects these taxes from wages (excluding tips) or other
funds of yours available to cover them. If your wages were
not enough to cover these taxes, you may have given your
employer the additional amounts needed. Your Form W-2
will include the tips you reported to your employer and the
taxes withheld. If there was not enough money to cover
the social security and Medicare tax (or railroad retirement
tax), your Form W-2 will also show the tax due in box 12
with codes A and B. See the instructions for Form 1040,
line 62; or Form 1040NR, line 57 to find out how to report
the tax due. If you worked in American Samoa, Guam, or
the U.S. Virgin Islands, the amount of uncollected tax due
is identified in box 12 on Form W-2AS, W-2GU, or W-2VI
with codes A and B. If you worked in Puerto Rico, Form
499R-2/W-2PR, boxes 22 and 23, show the uncollected
tax due. See the instructions for line 5 of Form 1040-PR or
1040-SS, to find out how to report the tax due.
Penalty for not reporting tips. If you did not report tips
to your employer as required, you may be charged a
penalty equal to 50% of the social security and Medicare
tax due on those tips. You can avoid this penalty if you
can show reasonable cause for not reporting these tips to
your employer. To do so, attach a statement to your
return explaining why you did not report them.
Additional information. See Pub. 531, Reporting Tip
Income.

Specific Instructions
Line 1. Complete a separate line for each employer. If
you had more than 5 employers in 2008, attach a
statement that contains all of the information (and in a
similar format) as required on Form 4137, line 1, or
complete and attach line 1 of additional Form(s) 4137.
Complete lines 2 through 13 on only one Form 4137. The
line 2 and line 3 amounts on that Form 4137 should be
the combined totals of all your Forms 4137 and attached
statement.
Column (a). Enter your employer’s name exactly as it is
entered in box c of your Form W-2.

Page

2

Column (b). For each employer’s name you entered in
column (a) enter the employer identification number or the
words “applied for” exactly as shown in box b of your
Form W-2.
Column (c). Include all cash and charge tips you
received. This includes the following:
● Total tips you reported to your employer. Tips you
reported, as required, by the 10th day of the month
following the month you received them are considered
income in the month you reported them. For example, tips
you received in December 2007 that you reported to your
employer after December 31, 2007, and before January
11, 2008, are considered income in 2008 and should be
included on your 2008 Form W-2 and reported on line 1
of Form 4137. However, tips you received in December
2008 that you reported to your employer after December
31, 2008, and before January 13, 2009, are considered
income in 2009. Do not include these tips on line 1.
● Tips you did not report to your employer on time or did
not report at all. These tips are considered income to you
in the month you actually received them. For example,
tips you received in December 2008 that you reported to
your employer after January 12, 2009, are considered
income in 2008 because you did not report them to your
employer on time.
● Tips you received that you were not required to report
to your employer because they totaled less than $20
during the month.
● Allocated tips you must report as income (see page 1).
Line 5. Enter only the tips you were not required to report
to your employer because the total received was less
than $20 in a calendar month. These tips are not subject
to social security and Medicare tax.
Line 10. If line 6 includes tips you received for work you
did as a federal, state, or local government employee and
your pay was subject only to the 1.45% Medicare tax,
subtract the amount of those tips from the line 6 amount
only for the purpose of comparing lines 6 and 9. Do not
reduce the actual entry on line 6. Enter “1.45% tips” and
the amount you subtracted on the dotted line next to line
10.
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 Internal Revenue Code
section 6103.
The average time and expenses required to complete
and file this form will vary depending on individual
circumstances. For the estimated averages, see the
instructions for your income tax return.
If you have suggestions for making this form simpler,
we would be happy to hear from you. See the instructions
for your income tax return.