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Form 4070 was the IRS form a tipped employee used to report cash tips to their employer. The IRS has since made Forms 4070 and 4070A historical and Publication 1244 obsolete, but the underlying duty survives. Employees who receive $20 or more in tips in a month must report the total by the tenth day of the following month so the employer can withhold and report the correct taxes.
Form 4070 and its companion daily log, Form 4070A, were how tipped employees met the reporting duty in Internal Revenue Code section 6053; now that both are historical, employees use any signed written statement or employer-provided system that captures the same information, as IRS Publication 531 describes. The employee records tips received directly from customers, charged tips paid out by the employer, and amounts paid to or received from other employees under a tip-sharing arrangement. The written statement must be signed, cover no more than one calendar month, and reach the employer by the tenth of the following month.
Employers are not required to use the IRS form. Any system capturing the same information, including a point-of-sale or payroll app entry, is acceptable for cash tip reporting, and many employers substitute their own statement. What matters is that reported tips flow into the pay run so income tax, Social Security, and Medicare are withheld and the amounts land in boxes 1, 5, and 7 of the W-2.
The usual problem is insufficient cash wages to cover withholding on large tip amounts. When wages cannot cover the tax, the employer withholds what it can and reports the uncollected Social Security and Medicare in box 12 with codes A and B, leaving the employee to settle the balance on their return. Accurate reporting also drives the employer's FICA tip credit and any Form 8027 allocation.
The form and its daily log are historical, but the reporting duty behind them has not changed. Employees use any signed written statement or employer-provided system that captures the same details: tips received directly from customers, charged tips paid out by the employer, and amounts exchanged with other employees under a tip-sharing arrangement.
By the tenth day of the month after the tips were received, and a single statement can cover no more than one calendar month. It has to be signed. Reported amounts then flow into the pay run so income tax, Social Security, and Medicare are withheld and the totals land in the right W-2 boxes.
The employer withholds what the available cash wages allow and reports the uncollected Social Security and Medicare in box 12 using codes A and B. The employee settles the remaining balance when filing a personal return. Explaining this to tipped staff in advance avoids a surprise at tax time.