The Internal Revenue Service released a questions and answers document (Rev. Rule 2012-18) that provides guidance on how taxes are imposed on tips under the Federal Insurance Contributions Act (FICA).
The guidance includes an explanation of employer and employee obligations. It is the employer’s obligation to withhold “the employee share of FICA taxes on the reported tips from the wages of the employee (other than tips) or from other funds made available by the employee for this purpose.”
The guidance also includes information on:
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