CashoutGlossary / Reported tips
Reported tips
The tips you tell your employer you received. Due monthly once they hit $20 from a job, they're taxed through payroll and shown on your W-2.
Reported tips are the tips you give your employer a written or electronic statement for. If your tips from one job reach $20 in a month, that month's report is due by the 10th of the next month, or the next business day if the 10th lands on a weekend or legal holiday. Your employer can ask you to report more often, like every shift, but one report can't cover more than a calendar month.
Report cash, check, and debit and credit card tips, plus tips you get from coworkers through a pool or tip-out. Leave out what you pass on to others and noncash tips like tickets, though noncash tips still go on your tax return. Service charges aren't tips and don't belong in the report.
Your employer withholds income tax, Social Security and Medicare on what you report, and it's included in box 1 of your W-2, with Social Security tips in box 7. Starting with 2026 W-2s, box 12 code TP shows the cash tips you reported, the figure used for No Tax on Tips. IRS Forms 4070 and 4070A are now historical, so use whatever statement your employer accepts.
The common mistake is under-reporting. Tips you don't report go on Form 4137, with a possible penalty of 50 percent of the Social Security and Medicare tax, and low reporting at a large restaurant can lead to allocated tips in box 8.
Related terms
Allocated tips · Form 4137 · Cash tip · Form W-2 · FICA
