Credit for Employer Social Security and Medicare Taxes, Form 8846

Form 8846 allows eligible food and beverage employers to claim a credit for social security and Medicare taxes paid on employees' tips. This eventually supports compliance with IRS regulations and minimizing tax liability.

Purpose of Form 8846

Certain food and beverage employers use Form 8846 to claim a credit for social security and Medicare taxes paid on employees' tips. This credit is part of the general business credit.

Who Should File Form 8846?

• Employers with tipped employees providing food or beverages.
• Those who paid or incurred social security and Medicare taxes on employee tips during the tax year.

Credit Calculation and Exclusions of Form 8846

• Calculate credit as the employer's social security and Medicare taxes on eligible tips.
• Consider the 0.9% Additional Medicare Tax.
• Exclude tips if wages meet or exceed $5.15 per hour.
• Check for tips exceeding the social security tax wage base.
• Follow guidelines for fiscal year taxpayers.

Note: For comprehensive details, refer to the PDF attached below.