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employees.
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On a typical business day, you employ more than 10 workers who together work more than 80 hours.
👉 If you own multiple establishments, you must file a separate Form 8027 for each one, even if they are in the same building. Additionally, if you file more than one Form 8027, you must also submit Form 8027-T, the transmittal form.
How to Calculate Employee Hours
If you’re unsure whether you meet the “more than 80 hours” test, calculate the average number of employee hours worked on a typical business day during both your busiest and least busy months. If the result is over 80 hours, you’re required to file.
Include all employees in the calculation, even those who don’t typically receive tips, such as cooks, cashiers, and dishwashers.
Filing Form 8027
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Deadline: Paper forms must be filed by the end of February, but if you file electronically, you have until the end of March.
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Extensions: File Form 8809 to request an extension.
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Electronic Filing: Employers can use IRS-approved software to import payroll and tip data from Excel or CSV files and file electronically.
Allocating Tips
Employers must allocate tips if the total tips reported by employees are less than 8% of gross receipts for the month. In this case:
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The employer must distribute the difference among employees.
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Each affected employee must receive a Form W-2 showing the allocated tips.
Penalties for Not Filing
Failure to file Form 8027 or issue W-2s on time can result in IRS penalties. These penalties may increase the longer the filing is delayed, making compliance essential for employers.
How 1099FIRE Can Help
At 1099FIRE, we provide the tools you need to stay compliant with IRS requirements. Our software makes it easy to:
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Prepare and e-file Form 8027
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Import data from external spreadsheets
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Generate accurate reports for your employees and the IRS
👉 Save time, reduce errors, and avoid penalties by letting us simplify your IRS reporting.