How to Fill Out IRS Form 8027 Step by Step

If you operate a large food or beverage establishment, the IRS requires you to file Form 8027 annually. This form reports your employees' tip income and helps the IRS identify potential underreporting. Here's exactly how to fill it out.

Who Needs to File Form 8027?

You must file Form 8027 if your establishment meets all of these criteria:

You provide food or beverages for consumption on the premises
Tipping is customary at your establishment
You employed 10 or more tipped employees on a typical business day during the previous year

Note: Each location files a separate Form 8027. If you have 3 restaurant locations, you file 3 forms.

When Is It Due?

Form 8027 is due by February 28 (or March 31 if filing electronically) of the year following the calendar year you're reporting. For example, 2025 data is due by February 28, 2026.

What Information Do You Need?

Before you start, gather these numbers for the calendar year:

Total charged tips — tips paid by credit/debit card
Total charge receipts — gross receipts from credit/debit card payments
Total cash receipts — gross receipts from cash payments
Total reported tips — the tips employees reported to you
TTOC codes for each tipped employee — Use our free lookup tool to find them

Step-by-Step Instructions

Line 1: Establishment Information

Fill in your establishment's name, address, EIN (Employer Identification Number), and type of establishment. Check the appropriate box:

Evening meals only
Evening and other meals
Meals other than evening meals
Alcoholic beverages

Line 2: Total Charged Tips

Enter the total amount of tips shown on charge receipts. This includes credit card, debit card, and any other electronic payment tips.

Line 3: Total Charge Receipts

Enter the total gross receipts from charge (credit/debit card) sales. This includes food, beverages, and any applicable taxes.

Line 4: Total Cash Receipts

Enter the total gross receipts from cash sales. Again, this includes food, beverage, and tax amounts.

Line 5: Total Receipts (Line 3 + Line 4)

Add Lines 3 and 4 together. This is your total gross receipts for the year.

Line 6: Tip Rate

Multiply Line 5 by 8% (0.08). This is the IRS's minimum expected tip percentage. The result is the minimum amount of tips the IRS expects your employees earned.

Line 7: Allocated Tips

If Line 6 is greater than Line 2 (total reported tips), the difference is the amount of tips you must allocate among your employees. Allocation can be done using one of three methods:

Hours worked method (most common)
Gross receipts method
Good faith agreement (requires IRS approval)

Line 8: Total Reported Tips

Enter the total tips that all employees reported to you during the year.

TTOC Codes on Form 8027

Each employee listed on Form 8027 must have the correct TTOC code. Common codes you'll need:

| TTOC Code | Occupation | |-----------|-----------| | 101 | Bartender | | 207 | Waiter/Waitress | | 201 | Host/Hostess | | 203 | Busser |

Don't know your employees' TTOC codes? Look them up instantly with our free tool →

Common Mistakes to Avoid

Wrong TTOC codes — Using the wrong code can trigger IRS questions. Verify your codes here.
Forgetting to allocate — If reported tips are below 8% of gross receipts, you must allocate the difference.
Missing the deadline — Late filing results in penalties ($50–$280 per form).
Not including all tipped employees — Every employee who received tips must be included.
Mixing up gross receipts — Don't deduct discounts or comps from gross receipts.

Simplify Your Reporting

Filling out Form 8027 manually is tedious and error-prone. Here's how to make it easier:

Search TTOC codes — Find any employee's code in seconds
Done for You mapping — Upload your staff list, get all codes mapped instantly

*Have questions about TTOC codes? Read our complete guide to TTOC codes →