Quarterly Payroll Tax Filing Checklist for Tipped Workers
Tax Content Lead · 7/31/2026
Quarterly Payroll Tax Filing Checklist for Tipped Workers
To file Form 941 quarterly for tax year 2025, use the following deadlines: April 30, July 31, October 31, and January 31. The quarterly payroll tax filing checklist for tipped workers involves understanding their income, FICA tax rate, and tax deductions, including the No Tax on Tips deduction, which caps at $25,000 of qualified tips per year. The employer must report tips of $20+ per month per employee and deduct and report tips on Form 8027 or Form 4137.
Understanding Tipped Income and FICA
FICA applies to tips, with a 7.65% tax rate (https://www.irs.gov/individuals/social-security-benefits). The No Tax on Tips deduction phases out above $150,000 Modified Adjusted Gross Income (MAGI) for single filers, according to the IRS (https://www.irs.gov/forms-pubs/about-form-1040).
The Treasury Tipped Occupation Codes (TTOC) are used to report tipped income. Tipped Occupation Codes must be reported in W-2 Box 14b by January 31, 2026 (https://www.irs.gov/forms-pubs/about-form-w-2).
Reporting Tips and Paying Payroll Taxes
- Report tips of $20+ per month per employer to the employer.
- Employers must complete Form 8027 for large food/beverage establishments (https://www.irs.gov/forms-pubs/about-form-8027).
- File Form 4137 for unreported tip income (https://www.irs.gov/forms-pubs/about-form-4137).
Employers must deduct and report tips on Form 8027 or Form 4137. Form 8027 is for large food/beverage establishments, while Form 4137 is for unreported tip income.
Comparing Payroll Tax Filing Options
File electronically using IRS Free File or e-file providers (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free). Use the IRS Online Account to view and pay payroll taxes (https://www.irs.gov/individuals/online-account). Consult a tax professional for guidance on payroll tax filing.
What is the deadline for filing Form 941?
The deadline for filing Form 941 is April 30, July 31, October 31, and January 31 for tax year 2025.
How do I report TTOC on W-2?
Report Tipped Occupation Codes (TTOC) in W-2 Box 14b by January 31, 2026.
What is the No Tax on Tips deduction and how does it work?
The No Tax on Tips deduction caps at $25,000 of qualified tips per year and phases out above $150,000 Modified Adjusted Gross Income (MAGI) for single filers.
Key Takeaways
Key Takeaways
- File Form 941 quarterly by April 30, July 31, October 31, and January 31 for tax year 2025.
- Report TTOC in W-2 Box 14b by January 31, 2026.
- Deduct and report tips on Form 8027 or Form 4137.
Example of No Tax on Tips Deduction
For tax year 2025, John, a server, earns $40,000 in qualified tips. His employer deducts and reports $25,000 of qualified tips on Form 8027. John is not required to report the $25,000 on his tax return, but he must report any tips above the $25,000 limit.
Closing Note
This article provides general information on quarterly payroll tax filing for tipped workers. Consult the IRS website or a tax professional for specific guidance on payroll tax filing.