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Show Social Security Requires Listing "Cash Tips" Brant amendments to the Social So-cial Security Act will affect employee em-ployee and employers, In businesses busi-nesses where "cash tips" are received. re-ceived. TTu new changes apply beginning Jan. 1, 1905, Roland V. Wise, district director for the Utah District Internal Revenue Service advised today. All employees who derive income in-come from "cash tips" will be required to maintain a daily record of tip income. When such cash, tips total $20 or more in any single calendar month, such tips must be reported in writing to the employer by the 10th day of the following month. Mr. V.'ise noted that such tips constitute wages and will be subject sub-ject to 4.2 Social Security tax, and to Income tax withholding. Employees are reminded by Mr. Wise of the additional Social Security benefits to be derived from the inclusion of tips as wage income, as now provided under the new law. Heretofore, tips have always been taxable income( but the employee receiv- ed no credits for Social Security purposes for such earnings. 'Hie inclusion of cash tips as Social Security wage Income will be a significant benefit to many employees em-ployees in their eventual retirement, retire-ment, or to the employees' survivors. sur-vivors. Mr. Wise stressed that empoly-ees empoly-ees who receive cash tips should be certain to keep a daily record rec-ord of this income, beginning Jan. 1, 1966. Forms 911 and 941A, "Employer's "Employ-er's Quarterly Federal Tax Return", Re-turn", will be revised in January 1966, to provide a column for use by employers to list "cash tips" reported by employees. Starting with the first quarter in 1966, employers must use these revised forms. |
