TaxBandits Knowledge Base

How to Correct Allocated Tips using Form W-2c?

If you find an error in the allocation of tips after filing Form W-2 with the SSA, you’ll need to correct it using Form W-2c. Here’s how you can do this:

1. Prepare Form W-2c: This form is specifically used to correct errors on Form W-2. It allows you to report any mistakes in the allocated tips that were previously reported in Box 8 of Form W-2.
    
2. Correct the Amount: On Form W-2c, you'll enter the corrected amount of allocated tips that should have been reported for the employee. Be sure to check that the new figure accurately reflects the correct allocation as per your revised records.
    
3. Submit to the SSA: Once you've completed Form W-2c with the corrected allocated tips, you'll submit it to the SSA. This ensures that the SSA's records match the corrected tip allocation.

Provide a Copy to the Employee: After submitting the correction to the SSA, you must also provide the employee with a copy of the corrected Form W-2c. This allows them to accurately report the revised amount of allocated tips on their tax return.