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Monthly tip reports after Form 4070: the employee report that now feeds W-2 box 12 code TP

Every tipped employee has had to hand their employer a written tip report each month for decades. For most small restaurants, salons and bars it became a habit nobody looks at: a slip, a POS screen, a number keyed into payroll. Two things changed. The IRS retired the familiar Form 4070, and the One Big Beautiful Bill Act made that same monthly report the source of the number your employees will use to claim the new tips deduction.

This page explains the connection in the statute, what a report has to contain now that there is no official form, when the next reports are due, and the edge cases where the monthly report and the W-2 don't line up.

The link in the statute: box 12 code TP is the employee's own report

The deduction in § 224(a) is for qualified tips "that are included on statements furnished to the individual pursuant to section … 6051(a)(18), or reported by the taxpayer on Form 4137." Section 6051 is the W-2 statute. The new paragraph (18) says what the employer must show:

"(18) the total amount of cash tips reported by the employee under section 6053(a) and the occupation described in section 224(d)(1) [of] such person"

— 26 U.S.C. § 6051(a)(18), as added by Pub. L. 119-21 (text in effect Sept. 28, 2026)

And § 6053(a) is the monthly tip report:

"Every employee who, in the course of his employment by an employer, receives in any calendar month tips which are wages … shall report all such tips in one or more written statements furnished to his employer on or before the 10th day following such month."

— 26 U.S.C. § 6053(a)

Read together: the W-2 tips amount behind the deduction is not "tips your POS recorded" or "tips you think were earned." It is the total of what the employee reported to you under § 6053(a). The final regulations restate the requirement: to be eligible for the deduction, qualified tips "must be included in the amount of cash tips that are separately reported" on one of those statements, "or reported by the taxpayer on Form 4137" (26 CFR § 1.224-1(d)(1)).

Form 4070 is gone. The report is not.

The IRS no longer publishes Form 4070 (Employee's Report of Tips to Employer) or Form 4070A (daily tip record). Publication 531 says both "were made historical," with prior revisions still available on the prior-year forms page. The obligation in § 6053(a) is unchanged, so the report now takes whatever form your system provides. If you give employees no other method, Publication 531 says they can give you a signed and dated statement containing:

• the employee's name, address, and social security number;
• your name, address, and business name (if different);
• the month, or the dates of any shorter period, the tips were received in;
• the total tips required to be reported for that period.

Publication 531 also tells employees that their employer "can have you furnish your tip statements electronically"; that you may require reports more often than monthly, but a statement "can't cover a period of more than 1 calendar month"; and an employee who uses an electronic tip record you provide "must receive and keep a paper copy."

[Our suggestion, not an IRS requirement] Because the W-2 must now also carry the employee's occupation (the same § 6051(a)(18) clause), it is worth adding one field to whatever report you use: the tipped role the employee worked in that period. An employee who both manages and waits tables is the case the regulations single out — a tip received as a restaurant manager is not a qualified tip, while one received while working as wait staff is (26 CFR § 1.224-1(c)(12), Examples 13 and 14). See the IRS occupation list and codes.

What goes in the report — and what doesn't

The pooling rule matters for the deduction: § 224(d)(3) counts "tips received under any tip-sharing arrangement" as cash tips, and the report is net of what the employee passed on. See tip pools and tip-outs for whose share qualifies.

When the next reports are due

The rule is the 10th of the following month, moved to the next day that is not a Saturday, Sunday, or legal holiday. Publication 531 flags that the October and November 10ths can collide with holidays. For the rest of 2026 and into 2027:

Dates computed by us from the § 6053(a) rule as described in Pub. 531 and the federal holiday calendar. If your employment ends mid-month, Publication 531 says the employee can report when employment ends.

The December–January boundary

December tips reported in January are the one place where "the month the tip was received" and "the W-2 year" split. Publication 531 is explicit for income-tax wages: tips received in December and reported to the employer "after the tax year but on or before January 10" are not included in box 1 of that year's W-2; they go on the next year's W-2 and the next year's return.

What happens when a report is missing or short

• For the employee: Publication 531 says not reporting tips to the employer as required can bring "a penalty equal to 50% of the social security, Medicare, Additional Medicare, or railroad retirement taxes" owed on the unreported tips, on top of the tax, unless the employee shows reasonable cause. Those taxes are paid with Form 4137 — which is also the form that keeps the tips eligible for the deduction.
• For you: you can only withhold on, pay employer FICA on, and put in box 12 code TP the tips that were reported to you. If reported tips at a food or beverage establishment fall below 8% of gross receipts, the allocation rules apply, and an allocated amount in box 8 cannot be put in code TP. See allocated tips and the Form 8027 gap.
• When wages can't cover the tax: the employee can give you money until year-end to cover it; otherwise Publication 531 sets the order in which you apply pay (taxes on regular pay first, then FICA on reported tips, then income tax on reported tips), and taxes you couldn't collect are shown on the W-2.

A short checklist for the October 13 report

1. Confirm every tipped employee has a way to report that produces a record you keep (paper statement or electronic, with a copy to the employee).
2. Check that each report covers no more than one calendar month.
3. Compare reported card tips against the card tips your POS paid out for the same month. A reported figure below the card-tip payout is worth a conversation [our suggestion].
4. Make sure pool participants report their share received, and pool contributors report net of what they passed on.
5. Record the employee's tipped role for the period, so the W-2 occupation code is not a reconstruction in January.

Related on this site: what small W-2 employers must report in 2026 · allocated tips (box 8) and Form 4137 · the IRS occupation list · tip pools and tip-outs · service charges vs tips · the W-2 filing threshold and the $20/month rule · 2025 W-2 penalty relief (Notice 2025-62)

Sources

• 26 U.S.C. § 224, Qualified tips (text in effect Sept. 22, 2026)
• 26 U.S.C. § 6051(a)(18) and § 6053(a)
• 26 CFR § 1.224-1 (final regulations), paragraphs (c)(12) and (d)
• IRS Publication 531, Reporting Tip Income (Rev. December 2024)