What is the FICA Tip Credit?
The FICA Tip Credit is a dollar-for-dollar tax credit available to employers who pay FICA taxes on employee tips. This is NOT a deduction—it's a direct reduction of your tax bill.
How much can my business claim?
Up to 7.65% of qualified tip income. For a restaurant with 20 tipped employees, this can mean $20,000+ per year in credits. The exact amount depends on your business type, number of employees, and reported tips.
Is my business eligible?
If you operate a restaurant, bar, hotel, or any hospitality business with tipped employees, you likely qualify. The key requirement is that you pay FICA taxes on reported tips.
How long does the process take?
Our streamlined process typically gets you funded within weeks, not months. We handle all the paperwork and IRS requirements, so you can focus on running your business.
Can I claim the credit for past years?
Yes! You can claim retroactively for previous tax years. Many of our clients receive substantial refunds for multiple years of unclaimed credits.
Is there a fee for your service?
We operate on a success-based model—you only pay when you receive your credit. There are no upfront costs or hidden fees.
How does this credit affect other tax incentives?
The FICA Tip Credit can be claimed alongside other tax credits and deductions. Our tax specialists ensure you maximize all available tax benefits without conflicts.
Do I need to reduce my wage deduction?
Yes, you must reduce your wage deduction by the amount of the credit claimed. However, the credit is typically more valuable than the deduction, resulting in a net tax benefit.
What documentation do I need to provide?
You'll need your business tax returns, payroll records showing tipped wages, Form 941 quarterly tax returns, and Form 8027 (Employer's Annual Information Return of Tip Income). Our team will guide you through the entire documentation process.
Will claiming this credit trigger an IRS audit?
The FICA Tip Credit is a legitimate, IRS-approved tax benefit. When properly documented and filed, it does not increase your audit risk. Our CPAs ensure full compliance with all IRS requirements.
Can franchise businesses claim this credit?
Yes! Both independent restaurants and franchise locations are eligible for the FICA Tip Credit, as long as they have tipped employees and meet the other eligibility requirements.
What if my employees don't report all their tips?
The credit applies only to reported tips on which you've paid FICA taxes. We can help you implement better tip reporting systems to maximize your credit going forward.
How far back can I claim the FICA Tip Credit?
Generally, you can file amended returns to claim the credit for up to 3 years back. This means you could recover credits from multiple prior tax years.
Does this work for seasonal businesses?
Absolutely! Seasonal restaurants, resorts, and hospitality businesses can claim the FICA Tip Credit for the periods when they employ tipped workers.
Can I claim this if I already have a CPA?
Yes! Many CPAs don't specialize in the FICA Tip Credit. We can work alongside your existing CPA to ensure you receive this valuable benefit while they handle your other tax needs.
What makes Tip Tax Partner different from other services?
We specialize exclusively in hospitality tax credits with over $1 billion processed. Our proprietary methods maximize returns, our process is faster than competitors, and we only get paid when you do.
