Simplify Form 8027 filing to report annual tip income and allocated tips for large food and beverage establishments. With 1099Online, you get built-in TIN-matching, bulk import, recipient copy delivery, and secure eFiling in one platform.
Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, is an annual IRS information return for large food or beverage establishments.
Employers use it to report gross receipts from the sale of food and beverages, along with the total tips their employees report each year. It also helps employers determine whether they need to allocate additional tips to tipped employees when reported tips fall below the IRS required 8% of gross receipts.
You must file Form 8027 if the food or beverage establishment you operate meets all these conditions:
The IRS calls this last point the 10-employee test. This test is based on the average number of employee hours worked on a business day. All employees at the food and beverage operation must be counted, not just tipped employees. Fast-food operations are excluded from this test. If you operate more than 1 qualifying location, file a separate Form 8027 for each one.
Form 8027 captures your establishment's key tip and receipt data for the year. You report:
The form also determines whether your establishment needs to allocate additional tips to tipped employees under IRS tip allocation rules.
For the 2026 tax year, there’s no new development. The IRS reminds filers to indicate whether the establishment accepts credit cards, debit cards, or other forms of payment. If yes, Lines 1 and 2 must be completed even when the amounts are zero.
Once you confirm your establishment qualifies for Form 8027 filing, here is what the IRS requires for your annual filing:
Form 8027 due dates for the 2026 tax year differ based on how you submit your return. The IRS encourages electronic filing even when it is not required.
| Filing Method | Deadline |
|---|---|
| Paper filing | March 1, 2027 |
| Electronic filing via FIRE | March 31, 2027 |
Note: When a due date falls on a Saturday, Sunday, or legal holiday, the IRS moves the deadline to the next business day.
1099Online is an IRS-authorized eFile provider for Form 8027. Here is how to complete your filing in 4 steps:
Sign in to your 1099Online account and select Form 8027. Enter your establishment name, address, Employer Identification Number (EIN), and establishment type.
Enter your gross receipts, charge receipts, and total charged tips. Add the tip totals reported by your directly and indirectly tipped employees.
Review your tip allocation calculation. If your establishment has an IRS-approved lower rate, enter it here and attach your determination letter.
Confirm your complete filing summary and submit Form 8027 securely to the IRS through 1099Online.
Form 8027 does not have a dollar threshold. Filing is required based on you operating a large food or beverage establishment that meets the IRS 10-employee test, which measures average employee hours worked per business day. Use the worksheet on the IRS Form 8027 instructions page to help determine whether your establishment qualifies.
A common issue is misclassifying directly and indirectly tipped employees. Directly tipped employees, such as waiters, receive tips from customers. Indirectly tipped employees, such as cooks and bussers, receive tips from other employees. Reporting tip totals in the wrong category can affect allocated tip calculations and may even lead to inaccurate Form W-2 entries.
Filing Form 8027 late or submitting an inaccurate return can trigger penalties under IRC Sections 6721 and 6722. Because Form 8027 data is used to prepare Form W-2 for directly tipped employees, an error can also create separate W-2 penalty exposure. Reasonable cause may reduce or waive late-filing penalties.
Allocated tips are additional tip amounts assigned by an employer to employees when the tips reported by them fall below a required percentage (8%) of the establishment's gross receipts. The employer calculates the shortfall and reports the allocated amount in Box 8 of each affected employee's Form W-2. Allocated tips are not subject to income
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