Form 4137 - Tip Income - Social Security and Medicare Tax

If you are entering an amount in box 8 of the W-2 for Allocated Tips, this amount will transfer to Line 1 of Form 4137 for the calculation of social security and Medicare tax on the tips to be reported on Line 5a of IRS Schedule 2 (Form 1040). The amount in box 8 is not included in box 1 wages of the W-2.

If you received other unreported tips, then this amount would also need to be entered in the Q&A for Form 4137.

To access the Q&A for Form 4137:

  1. From within your TaxAct® return (Online or Desktop) click Federal. On smaller devices, click in the upper left-hand corner, then select Federal.
  2. Click Other Income in the Federal Quick Q&A Topics menu to expand the category, then click Taxes on tip income.
  3. Click Yes on the screen titled Other Income - Unreported or Allocated Tips