What is the FICA Tip Credit?

The FICA Tip Credit (IRS Code Section 45B) is a dollar-for-dollar tax credit that reimburses employers for the FICA taxes (Social Security and Medicare) paid on employee tips above the federal minimum wage.

It’s a real IRS program under Section 45B of the tax code, has been available since 1993. You can literally look it up on
https://www.irs.gov/businesses/small-businesses-self-employed/fica-tip-credit-for-employers

This is not a deduction—it directly reduces your tax liability, providing immediate cash flow benefits to your business.

This credit is applicable to restaurants, bars, clubs, cafés, catering companies, and other businesses that report taxes on employee tips.

The limited awareness is largely due to accountants concentrating primarily on standard tax filings rather than on specialized tax credits like this one.

Why did my accountant not tell me about this?

Most accountants focus on compliance — filing what’s owed, not recovering what’s overpaid. There are over 2,500 business tax credits in the IRS code, and very few CPAs specialize in recovering them. That’s why 94% of eligible businesses never claim the §45B Tip refund.

Most accountants just haven’t worked with this credit before. But it’s a real IRS program under Section 45B of the tax code, created back in the early ’90s. You can literally look it up on uscode.house.gov.

Here’s the thing — accountants are great at filing returns, but they’re not experts in every one of the 2,500+ tax credits out there. Because of that, most restaurant owners have been overpaying payroll taxes for years without realizing it.

Our team specializes in this one credit — we help you stop the bleeding and recover the last three years of what you’ve already paid in. Once they see the actual refund results, even the accountants usually come around.

Why choose us?

Working with us is the clear choice. We are lightyears ahead of the very few CPA firms who even handle this specialized credit. We are able to calculate and perform your entire refund without you needing to dig up tons of paperwork like tax returns or payroll reports. Our CPAs has direct access to the IRS in order to pull transcripts, calculate your refund, e-file 3 years of returns and get you paid faster.

All you need is to take 3 Minutes to fill out some forms on our application portal.

How long does the process take?

While most firms take months, our streamlined process typically gets you funded within weeks.

You simply have to take 3 Minutes to fill out some forms on our application portal

After you provide the necessary information, our team handles everything, and you can expect to receive your credit in 4-8 weeks in most cases. For retroactive claims, the timeline may be slightly longer.

What documentation do I need?

We need your business tax returns (Form 1120, 1120S, or 1065), payroll reports showing tip income (Form 941), Form 8027 (Employer's Annual Information Return of Tip Income), and Form 8846 if you've previously filed for the credit. Don't worry if you don't have everything—our team will guide you through exactly what's needed.

How is the credit calculated?

The credit is calculated as 7.65% (the combined FICA tax rate) of the tip income that exceeds the federal minimum wage. The formula is: (Total reported tips - (Federal minimum wage × Total hours worked)) × 7.65%. Our team handles all these calculations to ensure maximum accuracy and benefit.

What is your fee?

There’s no upfront cost and no retainer, ever.
We do all the work — gathering your data, filing the amendments, tracking your refund, and making sure everything is IRS-compliant. We charge a 30% success fee, but only after you’ve received your refund from the IRS.

Once the IRS issues your refund — and the money is direct deposited into your account — only then do we invoice for our fee.

So if for any reason the IRS doesn’t issue a refund, you pay nothing.
It’s literally a ‘No Refund, No Fee’ guarantee.

How does this credit affect other tax incentives?

The FICA tip credit can be claimed alongside other tax incentives like the Work Opportunity Tax Credit (WOTC) and Employee Retention Credit (ERC).

However, you cannot claim FICA tip credit on the same wages used for other wage-based credits. Our tax specialists will optimize your overall tax strategy to maximize all available credits.

Does claiming this credit trigger an audit?

Claiming the FICA tip credit does not increase your audit risk. Our process ensures all claims are thoroughly documented and compliant with IRS requirements. We maintain a 100% compliance rate and stand behind every claim we process.

Can I claim the credit for past years?

Yes, you can claim the FICA tip credit retroactively by filing amended returns for up to 3 years.

This means if you've never claimed this credit before, you could receive a substantial refund for prior tax years. Our team specializes in maximizing these retroactive claims.

What if I am an LLC, S-Corp or a C-Corp?

According to the IRS, an LLC or S-Corp are considered pass through entities, which means this refund goes to you as the business owner. In the case of a C-Corp, the refund would be sent to the business.