Form 8027 is the annual information return that large food or beverage establishments file to report gross receipts, charged tips, and tips employees reported, and to figure allocated tips when reported tips fall below 8% of gross receipts. You file one for each large food or beverage establishment.
Key takeaways
- File Form 8027 only if you meet all four large food or beverage establishment tests, including more than 10 employees on a typical business day.
- Lines 1–2 cover charged tips and charge receipts, line 3 service charges under 10%, lines 4a–4c reported tips, and line 5 gross receipts.
- Line 6 is 8% of line 5 (or your approved lower rate). Line 7 allocates any shortfall.
- Due the last day of February on paper, or March 31 if filed electronically.
Who must file Form 8027
- The establishment is in the 50 states or the District of Columbia.
- Food or beverages are provided for consumption on the premises (fast food operations are excluded).
- Tipping of food or beverage employees by customers is customary.
- You normally employed more than 10 employees on a typical business day during the preceding calendar year. Count all employees at all of your food or beverage operations.
Form 8027 line by line
| Line | What you enter |
|---|---|
| Type of establishment | Check one box: evening meals only, evening and other meals, meals other than evening meals, or alcoholic beverages with food only incidental |
| Credit card question | Check Yes or No. If Yes, you must complete lines 1 and 2, even if zero |
| Line 1 | Total charged tips for the calendar year |
| Line 2 | Total charge receipts showing charged tips |
| Line 3 | Total service charges of less than 10% paid as wages to employees |
| Line 4a | Total tips reported by indirectly tipped employees (for example, bussers) |
| Line 4b | Total tips reported by directly tipped employees |
| Line 4c | Total tips reported (line 4a + line 4b) |
| Line 5 | Gross receipts from food and beverages |
| Line 6 | Line 5 multiplied by 8% (or your IRS-approved lower rate) |
| Line 7 | Allocation of tips if line 6 exceeds line 4c: check the method used (7a hours worked, 7b gross receipts, 7c good-faith agreement) |
| Line 8 | Total number of directly tipped employees who worked there at any time during the year |
Allocating tips (line 7)
If tips reported during a payroll period are less than 8% of gross receipts (or an approved lower rate, which can't be below 2%), you must allocate the difference among directly tipped employees with a shortfall. Report each employee's allocated tips in W-2 Box 8. Don't withhold tax on them, and don't include them in Boxes 1, 5, or 7. See https://ttoccodes.com/blog/allocated-tips-vs-unreported-tips-form-8027 .
Filing and deadlines
- Paper: by the last day of February, or the next business day if it falls on a weekend (March 2, 2026 for 2025). Include Form 8027-T when filing more than one paper Form 8027.
- Electronic: by March 31.
- Extension: request one on Form 8809 by the original due date.
- Penalties apply for late or incorrect returns under the information-return rules. Details: https://ttoccodes.com/blog/form-8027-deadline-penalty-filing-requirements-and-consequences .
Official instructions: https://www.irs.gov/instructions/i8027 . Form and updates: https://www.irs.gov/forms-pubs/about-form-8027 .
What is Form 8027 used for?
Large food or beverage establishments use Form 8027 to report annual gross receipts from food and beverages, charged tips, and tips reported by employees. They also use it to figure allocated tips when reported tips fall below 8% of gross receipts.
What goes on line 6 of Form 8027?
Line 6 is line 5 (gross receipts from food and beverages) multiplied by 8%, or by your IRS-approved lower rate. If line 6 is more than line 4c (total tips reported), you complete line 7 to allocate the difference among directly tipped employees.
Do I need a separate Form 8027 for each location?
Yes. You file a separate Form 8027 for each large food or beverage establishment. Once the 10-employee test is met across your operations, this applies even to an establishment with 10 or fewer employees on its own.
This article is general information, not tax advice. Confirm your situation with the current IRS instructions linked above or a tax professional.