IRC §45B Tip Credit Recovery
Your business has already paid this tax credit. Now it's time to claim it back.
Restaurants, bars, salons, and spas with tipped W-2 employees qualify for the FICA Tip Credit under IRC §45B. We calculate, file Form 8846, and recover up to 3 prior years — specialist and CPA reviewed.
$ 1,300 +
Average annual credit per tipped employee
3 years
Retroactive look-back recovery
7.65 %
HOW IT WORKS
From intake to credit here's the process.
Step 1: Tell us about your business
Quick 10-minute intake employees, tips, payroll basics.
Step 2: Specialists calculate your credit
We compute qualifying tip base and credit per year.
Step 3: We prepare Form 8846
Engineer + CPA reviewed package, ready to file.
Step 4: File with your return
Filed with current year or amended for prior years.
Step 5: Credit applied refund issued
Reduces tax owed or generates a refund check.
Who is this for?
If your employees receive tips and you pay payroll taxes, you likely qualify.
Potentially Eligible Protective Claim Filers Include:
Food & Beverage
Threshold: §45B frozen rate — $5.15/hr
Restaurants, bars, cafés, hotels, catering
– W-2 employees receiving reported tips
– Employer pays FICA on those tips
– Tips reported on Form 8027 or equivalent
– Currently filing or have filed past returns
Salons / Personal Care
Threshold: $7.25/hr — 2025 expansion (One Big Beautiful Bill Act)
Salons, barbershops, nail salons, spas
– Tipped W-2 stylists, barbers, technicians
– Employer-paid FICA on reported tips
– Service-based business with consistent tipping
– Newly eligible under 2025 expansion
The §45B program
A federal tax credit Congress wrote specifically for tipped-employee businesses.
Under Internal Revenue Code §45B, the employer’s share of FICA (Social Security and Medicare) tax paid on tip income above the federal threshold is returned as a dollar-for-dollar tax credit — not a deduction. It’s claimed on Form 8846 and flows into the General Business Credit on Form 3800.
Most owners never claim it. We recover what you’ve already paid — and amend up to 3 prior years.
Frequently Asked Questions
Yes. The FICA Tip Credit under IRC §45B is based on tips reported above the federal threshold ($5.15/hr for food & beverage, $7.25/hr for salons under the 2025 expansion), not on whether your wages exceed minimum wage. Most tipped employers qualify.
Yes. The IRS allows you to amend up to 3 prior tax years to claim the credit retroactively. Our specialists prepare the amended returns and Form 8846 for each year.
We calculate the qualifying tip base (tips above the wage threshold), multiply by 7.65% (employer FICA rate), and apply across active years. Total Credit = (Qualifying Tip Base × 7.65%) × Years.
Form 8846 (Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips) is filed with your business return and flows into the General Business Credit (Form 3800). For prior years, Form 1120-X or 1040-X is used to amend.
No. The FICA Tip Credit is an employer-only credit. It does not change employee W-2s, their reported tips, or their personal tax obligations.
Intake takes 10–15 minutes. Specialist review and Form 8846 preparation typically complete within 2–4 weeks. Refunds for amended years are issued by the IRS, usually within 8–12 weeks of filing.
