CashoutGlossary / Form 8027
Form 8027
The IRS form large restaurants and bars file each year to report sales and tips, and to figure allocated tips when reported tips run low.
Form 8027, the Employer's Annual Information Return of Tip Income and Allocated Tips, is filed by employers, not workers. An employer files it for each large food or beverage establishment: a place that serves food or drinks for consumption on the premises (not fast food), where tipping is customary, and that had more than 10 employees on a typical business day in the prior year, which the IRS measures as more than 80 employee hours.
The form reports the establishment's gross receipts and the tips employees reported, including charged tips from card receipts. If reported tips for a period come to less than 8 percent of gross receipts, the employer allocates the shortfall to directly tipped employees, and it shows up in box 8 of their W-2s as allocated tips. Carryout sales and sales with a service charge of 10 percent or more are nonallocable receipts, left out of the 8 percent figure.
For 2026 returns, the draft instructions set the due date at March 1, 2027 on paper or March 31, 2027 if filed electronically, and an employer that has to file 10 or more information returns must file electronically.
You never file Form 8027 yourself. What it means for you is box 8: if there's a number, you report it as income on Form 4137 or keep records showing you got less. A common mistake is thinking the 8 percent rule means you only have to report 8 percent of sales. All tips you receive are income; the 8 percent only decides when your employer has to allocate.
Related terms
Allocated tips · Form 4137 · Reported tips · Form W-2
