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Taxing on Tips Maryland

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  • Taxing on Tips Maryland

    Please help... and tell me its not true!! Employer has decided to change our tip reporting structure and is saying 'per the irs' that we bartenders now have to declare 10% of our register sales as our tips. I have been trying to research but not sure that I understand the ATip Requirement/Law.
    We have 6 bartenders on any given night, then have to participate in a tip pool and split tips, so not only do I lose money there for the slugs that don't pull their weight but now we are being asked to be taxed on more money than we can potentially even end up walking out the door with?????
    Do we have to claim 10% of the total sales?
    Can someone help explain or point me in the right direction where I can find the info - in layman's terms!!??

  • #2
    This is not an area I understand well, but some publications from the IRS are linked below. As I read it, the employer is required to declare 8% of gross receipts as allocated tips, but this amount may be reduced, upon request by the employer OR a majority of employees (see the instructions for Form 8027).
    Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.


    • #3
      You only HAVE to claim what tips you get to keep. If your tips are $60 and you have to put $10 into the tip pool, then you report $50. The employer CANNOT mandate that you report tips that you did not receive. I suggest you keep a daily tip diary.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.