CashoutGlossary / Form 4137
Form 4137
The IRS form you file to pay Social Security and Medicare tax on tips you didn't report to your employer, including allocated tips from W-2 box 8.
Form 4137, Social Security and Medicare Tax on Unreported Tip Income, is how you pay the payroll tax your employer never withheld because it didn't know about the tips. You must file it if you got $20 or more in cash and card tips in a calendar month and didn't report all of them to your employer, or if W-2 box 8 shows allocated tips you must report as income.
Line 4 is the tips you received minus the tips you reported, and that amount also goes on Form 1040 as income. Tips that stayed under $20 in a month come off on line 5, because they aren't subject to these taxes. The rest is taxed at 6.2% for Social Security, up to the $184,500 wage base for 2026, and 1.45% for Medicare. The total goes on Schedule 2.
It matters more in 2026. Tips you report on Form 4137 can count toward the No Tax on Tips deduction, and they are credited to your Social Security record. The 2026 form is still a draft as of October 2026.
Common mistake: treating Form 4137 as a free do-over. If you didn't report tips to your employer as required, you can be charged a penalty of 50% of the Social Security and Medicare tax on them, unless you attach a statement showing reasonable cause and not willful neglect.
Related terms
Allocated tips · Reported tips · Form W-2 · FICA · Qualified tips
