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Tipped Employee in New Hampshire , Need clarification.. New Hampshire

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  • Tipped Employee in New Hampshire , Need clarification.. New Hampshire

    When your a tipped employee how does the employer decided what number to claim on your paycheck as earned Tips? I'm the one who should be giving him the claimed $$ amount I thought. Could someone give me some clarification on this topic?

    Thanks

  • #2
    The problem is this. There are two very different federal laws with two very different objectives. I do not know which (if any) of these laws your employer is reacting to.

    - FLSA covers minimum wage, and the tip specific rules are part of the minimum wage rules. Federal minimum wage is $7.25/hr, but employers can pay tipped employees as little as $2.13/hr, assuming that tips cover the remaining $5.12/hr. Meaning that employers have a strong incentive under this law to claim at least $5.12/hr in tips
    http://www.dol.gov/whd/regs/compliance/whdfs15.htm

    - IRC covers taxable wages (which includes tips) and IRS wants the maximum amount of taxable wages claimed. Both employees and employers have a tax advantage to under reporting actual tips received. This is illegal but it happens. IRS not surprisingly takes strong exception to this practice and puts a lot of pressure on employers to fully report all tips. Since IRS is not physically in all employers at all times counting actual tips, the IRS instead guesses on what they think the tips should be and tries to hold the employer to that number. The IRS TRAC program is directed at this.
    http://www.wagehourblog.com/2010/07/...ome/index.html
    http://www.irs.gov/pub/irs-pdf/p1244.pdf
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Here is some info on tipped employees NH

      http://www.minimum-wage.org/new-hamp...e-minimum-wage
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      • #4
        You could use this IRS form to report your tips...

        http://www.irs.gov/pub/irs-pdf/p1244.pdf
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