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Form 8846: Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips
IRS Form 8846 is used to claim a credit for employer social security and Medicare taxes paid on certain employee tips. The final calculated amount must be multiplied by 7.65%.
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IRS Form 8846 - Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips
IRS Form 8846 is used to claim a credit for employer social security and Medicare taxes paid on certain employee tips. The final calculated amount must be multiplied by 7.65%.
Risk Radar
Scan points- 1Ensure you correctly reduce tips used for the credit by amounts exceeding the applicable minimum wage rate ($7.25/hour for beauty service employers).
- 2Failing to attach Form 8846 to the corresponding tax return.
- 3Calculating Line 3 by failing to subtract tips that are not subject to the credit provisions (Line 2).
- 4Using a percentage other than 7.65% when multiplying line 3.
- 5Reporting the final amount on the wrong form (e.g., using Form 3800 instead of Schedule K for S corps).
Plain English
This form helps employers calculate a tax credit based on specific amounts of tips received by employees. It covers the social security and Medicare taxes that the business paid using those tips. This resulting credit is then added to your overall general business credit amount.
Submission Date
- Filing date: 2025-12-23 10:10:37
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when an employer paid or incurred employer social security and Medicare taxes on tips received by employees in food/beverage services or beauty/spa treatments, provided tipping for those services is customary.
- Do not use it when the only source for the credit is a partnership or S corporation; instead, report the credit directly on line 4f in Part III of Form 3800.
- Check Form 3800 (Part III) instead when filing as an all-other taxpayer whose only source for this credit is a partnership or S corporation.
Deadline or filing window
The credit can be claimed or elected not to claim any time within 3 years from the due date of your return on either an original or amended return.
Checklist
What you need before filling it out
Credit calculation
Line 3 multiplied by 7.65% (0.0765) · Form p.1, line 4
P/S Corp reporting location
Schedule K or Form 3800, Part III, line 4f · Form p.1, line 6
Wage base threshold check
$176,100 for tipped employees · Form p.2, line 4 instructions
Food/Beverage exclusion limit
Cannot claim credit for tips used to meet the federal minimum wage rate of $5.15 an hour (Jan 1, 2007) · Form p.2, Food or beverage employers section
Filing window
Any time within 3 years from the due date of your return · Form p.2, general instructions
Before you submit
- 1Partnerships and S corporations must file Form 8846 if they wish to claim this credit; other taxpayers are not required to complete or file it.
- 2To calculate the final amount, subtract tips not subject to the credit from total tips (Line 3), then multiply Line 3 by 7.65%.
- 3The resulting calculated credit amount must be reported on Schedule K or Form 3800, Part III, line 4f.
- 4Confirm that you are filing within 3 years from the due date of your original return or an amended tax return.
- 5Always attach Form 8846 to the applicable tax return and verify that the form edition is current before submitting.
How to file this form
- 1Determine if the business type qualifies by confirming employees received tips for food/beverages or beauty/spa treatments where tipping is customary.
- 2Calculate Line 3 by subtracting tips not subject to credit (Line 2) from total tips received (Line 1).
- 3If tipped employee wages and tips exceeded $176,100, complete the separate computation required on line 4 and enter the resulting sum onto line 4.
- 4Add lines 4 and 5 to determine the final credit amount for reporting on Schedule K or Form 3800, Part III, line 4f.
Known limitations
- 1The credit can only be claimed for employer social security and Medicare taxes paid by employers in certain businesses where tipping is customary.
- 2Food or beverage employers cannot claim the credit for taxes on any tips that are used to meet the federal minimum wage rate in effect on January 1, 2007, of $5.15 an hour.
- 3The form must be filed if you had employees who received tips from customers for providing barbering and hair care, nail care, esthetics, or body and spa treatment services, if tipping of employees for providing such services is customary.
- 4All other taxpayers are not required to complete or file Form 8846 if their only source for this credit is a partnership or S corporation.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->This form is based on a revision date of 20/25. For current instructions or changes, users should visit www.irs.gov/Form8846. The tax credit was extended for tax years beginning after 2024 to certain beauty service businesses.
What changed or needs a fresh check
- Edition date — confirm the form revision is 20/25 on Form p.1.
- Latest information page — verify that www.irs.gov/Form8846 provides current guidance.
- Mailing address — Not stated in the official source.
- Signature — Not stated in the official source.
Quick Facts
Downloads
After you file
- 1Retain books or records relating to Form 8846 and its instructions as long as their contents may become material in the administration of any Internal Revenue law.
- 2The credit can be claimed or elected not to claim within 3 years from the due date of your return, whether original or amended.
- 3If filing an amended return, the Form 8846 must still adhere to the 3-year window from the original due date.
- 4Keep a copy of the completed and filed Form 8846 for record keeping.
Sources
- SRCForm p.1 — Claim this credit only for employer social security and Medicare taxes paid by employers in certain businesses where tipping is customary.
- SRCForm p.1 — Partnerships and S corporations must report the amount on Schedule K or Form 3800, Part III, line 4f.
- SRCForm p.2 — The tax credit was extended to certain beauty service businesses for tax years beginning after 2024.
- SRCForm p.2 — You can claim or elect not to claim the credit any time within 3 years from the due date of your return on either your original return or on an amended return.
- SRCForm p.2 — Partnerships and S corporations must file this form to claim the credit.
- SRCForm p.2 — For information regarding taxes imposed on tips, including information on the difference between tips and service charges, see Revenue Ruling 2012-18, 2012-26 I.R.B., at www.irs.gov/irb/2012-26_IRB#RR-2012-18.
Common confusion points
Do I have to file Form 8846 if my credit comes from a partnership or S corporation?
Partnerships and S corporations must file this form to claim the credit.
→ File Form 8846.
If my wages and tips exceed the social security wage base, what do I do?
If you have an employee with wages and tips paid in 2026 that exceeded the 2026 social security wage base of $184,500 by the end of the 2025 fiscal year, follow the line 4 instructions above to determine the amount to enter on that line.
→ Follow the specific instructions for line 4.
Can I claim this credit more than once?
You can claim or elect not to claim the credit any time within 3 years from the due date of your return on either your original return or on an amended return.
→ Check if you are filing a revised or amended return.
What happens if my source for the credit is only a partnership or S corporation?
All other taxpayers are not required to complete or file Form 8846 if their only source for this credit is a partnership or S corporation, and instead must report it on Form 3800, Part III, line 4f.
→ Report the amount directly on Form 3800.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Filing an amended return allows claiming or electing not to claim the credit within 3 years from the due date.
Questions about IRS Form 8846
What is IRS Form 8846 used for?
This form helps employers calculate a tax credit based on specific amounts of tips received by employees. It covers the social security and Medicare taxes that the business paid using those tips. This resulting credit is then added to your overall general business credit amount.
Who must file IRS Form 8846?
Partnerships and S corporations must file Form 8846 if they wish to claim the credit. Other taxpayers are not required to complete or file this form if their only source for this credit is a partnership or S corporation.
What information does IRS Form 8846 require?
The form collects tips received by employees (Line 1) and calculates the final amount of creditable tips on Line 3, which requires subtracting tips that are not subject to the credit provisions. The resulting total must be reported on Schedule K or Form 3800, Part III, line 4f.
When is IRS Form 8846 due?
You can claim or elect not to claim the credit any time within 3 years from the due date of your return on either your original return or on an amended return.
Where do I file IRS Form 8846?
The form must be attached to a tax return. The source does not specify alternate filing locations or service centers for Form 8846.
How do I complete IRS Form 8846?
First, calculate Line 3 by subtracting tips not subject to the credit provisions (Line 2) from tips received (Line 1). Next, multiply line 3 by 7.65% to determine the final amount of the credit. Finally, report this calculated amount on Schedule K or Form 3800, Part III, line 4f.
What happens if IRS Form 8846 is filed incorrectly?
The information provided on this form is required to ensure compliance with the Internal Revenue laws of the United States.
Do I have to file Form 8846 if my credit comes from a partnership or S corporation?
Partnerships and S corporations must file this form to claim the credit. File Form 8846.
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