Credit for Employer Social Security and Medicare Taxes (Form 8846)

Form 8846 is used by eligible food and beverage employers to claim a credit for social security and Medicare taxes paid on employees' tips. It falls under the general business credit and must be filed within 3 years from the return's due date.

  • Purpose of Form

    • Claim credit for specified employer-paid taxes on employees' tips.
    • Integral part of the general business credit.
  • Filing Requirements

    • Required for partnerships and S corporations.
    • Other taxpayers can report through Form 3800 if sourced from a partnership or S corporation.
  • Eligibility Criteria

    • Employers with tipped employees.
    • Employers paying or incurring social security and Medicare taxes on tipped employees.
  • Credit Calculation

    • Credit equals employer taxes on eligible tips.
    • Exclusions for tips used to meet federal minimum wage.
  • Additional Medicare Tax

    • Applies to Medicare wages and tips.
    • Imposed only on the employee; no impact on the employer's credit.

Overall, the Form 8846 helps businesses in the food industry claim the credit for Social Security and Medicare taxes paid on certain employee tips.

*To view the current year's Form 8846, click here.