Jorns & Associates
FICA Tip Credit

FICA Tip Credit

The FICA Tip Credit is a federal tax incentive allowing employers to recover a portion of FICA taxes paid on employee tips. Enacted in 1993 under the Revenue Reconciliation Act, this Tax Credit is claimed in conjunction with your company’s federal income tax filing. The credit reduces federal income tax liability rather than payroll tax liability directly.

  • 1993

    Enacted under the Revenue Reconciliation Act

  • 7.65%

    Employer FICA rate paid on qualifying tips

  • Dollar-for-dollar

    Reduction of federal income tax liability

Who qualifies

Standard businesses with traditionally tipped employees that qualify for FICA include but are not limited to the below:

  • Restaurants

  • Barbers

  • Salons

  • Nail care

  • Spa Services

  • Bars & Nightclubs

  • Hotels

  • Catering companies

  • Casinos

How it works

Three steps from reported tips to a filed credit

Hospitality staff at work

A dollar-for-dollar credit that is frequently overlooked

  1. 1

    Employees report their tips

    Tipped staff report their tip income, and as the employer you pay the 7.65% FICA share on those tips.

  2. 2

    We identify the creditable tips

    Tips above the amount needed to bring wages to the federal minimum are creditable. We separate those from the rest of your payroll data.

  3. 3

    The credit is claimed with your return

    The credit is filed alongside your company’s federal income tax return and reduces income tax liability dollar-for-dollar.

Our values

What it is like to work with us

Six commitments that shape every engagement, from the first eligibility call through to the filed claim.

  • Trust

    We are committed to developing strong lasting relationships through commitment, communication, and honesty.

  • Expertise

    At Jorns & Associates our dedicated team of professionals have years of experience helping businesses navigate the ever-changing tax code and regulatory environment.

  • Community

    We are committed to making a difference in every community we work in and our team has logged tens of thousands of hours and invested millions of dollars into local and national charitable organizations.

  • Ethics

    Jorns & Associates is committed to conducting business the right way.

  • Efficiency

    Our team specializes at helping companies operate at optimal capacity. At Jorns & Associates we streamline every step of the accounting process to ensure filings are done on time, every time.

  • Transparency

    Many professional service companies surprise clients with completely unexpected hourly charges or hidden fees. At Jorns & Associates, we pride ourselves on our transparency when it comes to the fees associated with our services.

Recover the FICA you paid on tips.

We pull the creditable tips out of your payroll data and file the credit with your return.

877-465-6767