Employer's Annual Information Return of Tip Income in Aurora, Illinois (2026)
Failing to file this annual return can trigger a matching notice from the IRS and result in employer liability for uncollected FICA taxes on reported tips. You must submit the Employer's Annual Information Return of Tip Income (Form 8027) for your Aurora, Illinois restaurant to the Internal Revenue Service. Also known as a Form 8027 filing, key facts:
- 48 fields — ApronPrep auto-fills 40
- $0–$0 government filing fees
- Varies processing time, as this is an annual information return
Analyzed from Employer's Annual Information Return of Tip Income
83% from one compliance interview
Manual entry or document upload required
Why You Need a Employer's Annual Information Return of Tip Income
The Employer's Annual Information Return of Tip Income is a federal requirement mandated by the Internal Revenue Code (Title 26), specifically Sections 3121(q) and 6053. These sections require employers to report employees' tip income, which is subject to FICA taxes (Social Security and Medicare). While this is a federal form (IRS Form 8027), Aurora, Illinois-based restaurant and bar owners must file it because federal tax obligations apply regardless of state or local jurisdiction. The form is filed annually with the Internal Revenue Service, not the city of Aurora, to reconcile total reported tips, allocate unreported tips among employees, and substantiate the employer's share of tax payments. Filing this form is a non-negotiable part of operating a tipped-employee business.
Failing to file or filing inaccurately triggers significant federal penalties, not local Aurora fines. These include:
- Failure-to-file penalties: 5% of the unpaid tax per month, up to a maximum of 25%.
- Failure-to-pay penalties: 0.5% of the unpaid tax per month, in addition to the filing penalty.
- Accrued interest: Charged on any unpaid tax and penalties from the due date.
- Operational and legal risks: Persistent non-compliance can trigger a payroll audit, leading to back-tax assessments for multiple years. It can also jeopardize lease agreements that require proof of good standing with tax authorities and complicate the sale of your business. In cases of deliberate fraud or evasion, criminal prosecution is possible.
Legal code: Internal Revenue Code (Title 26)
Recent update: For tax year 2026, the IRS has issued updated instructions for Form 8027, which include revised thresholds for establishments required to file and clarified rules for allocating large, unreported tip amounts; the core reporting obligation and deadline remain unchanged.
Who Needs a Employer's Annual Information Return of Tip Income?
| Type | Required | Notes |
|---|---|---|
| Restaurant (Full-Service) | Required | Required because it employs tipped food and beverage staff, and must annually reconcile tip income reported by employees on Forms 4070 with total receipts and the 8027 filed with the IRS. |
| Bar / Nightclub | Required | Required as establishments with employees who customarily receive tips (bartenders, servers) must file this annual information return as per IRS Publication 531 and Illinois tax withholding rules. |
| Food Truck | Required | Required if it employs tipped staff; while cash payment models vary, any employee receiving $20 or more in tips in a month triggers reporting obligations under IRS tax code §6053. |
| Coffee Shop / Café | Not Required | Typically not required unless it operates as a full-service establishment with a designated tipping jar or counter staff who receive and report tips, which is uncommon under standard counter-service models. |
See which restaurant types need this requirement — and which don't.
See Full Requirements →Field-by-Field Guide (48 Fields)
40 of 48 auto-filledAmended Return
checkboxCheck this box only if you are filing to correct a previously submitted Form 8027 for this establishment and tax year.
COMMON MISTAKE: Checking this box for an original filing; this flags the return incorrectly and can delay processing.
Final Return
checkboxCheck this box only if the establishment permanently closed or stopped serving food and beverages during the tax year reported.
COMMON MISTAKE: Checking this for a temporary closure or seasonal hiatus, which misrepresents the business status to the IRS.
Type: Alcoholic Beverages
checkboxCheck this box if your establishment's food and beverage operations consist primarily of serving alcoholic beverages, such as a bar or tavern.
Type: Meals Other Than Evening
checkboxCheck this box if your establishment primarily serves meals during breakfast, brunch, or lunch periods, not during evening dinner hours.
Type: Evening and Other Meals
checkboxCheck this box if your establishment serves meals both during evening dinner hours and during other meal periods (e.g., lunch and dinner).
Type: Evening Meals Only
checkboxCheck this box if your establishment's food service is exclusively for evening meals, typically dinner service only.
Accepts Credit Cards: Yes
checkboxCheck this box if your establishment accepts credit or debit cards as a form of payment for food and beverages.
COMMON MISTAKE: Checking both 'Yes' and 'No'; you must select only one, as the IRS uses this to validate reported charge receipts.
Accepts Credit Cards: No
checkboxCheck this box if your establishment does not accept any credit or debit cards; all payments are cash, check, or other non-card methods.
COMMON MISTAKE: Incorrectly selecting 'No' when you do accept cards, which creates a mismatch with your gross receipt calculations.
Line 7c: Allocation Method - Good Faith Agreement
checkboxCheck this box only if you used a written, good-faith agreement between employer and employees to allocate tip income, as permitted by IRS rules.
COMMON MISTAKE: Selecting this without a valid, documented agreement in place, which fails IRS scrutiny and can trigger an audit or penalty.
Line 7b: Allocation Method - Gross Receipts
checkboxCheck this box if you used the IRS-prescribed gross receipts method to allocate tips, which is the default method for most food and beverage establishments.
COMMON MISTAKE: Not selecting any allocation method; one box in Line 7 must be checked for the form to be considered complete.
ApronPrep auto-fills 40 of 48 fields from a single compliance interview — no re-typing, no guessing what the government expects.
Top 5 Employer's Annual Information Return of Tip Income Mistakes
1. Filing Form 8027 Instead of Filing 8027 and Filing 8027-T
In Aurora, Illinois, large food and beverage establishments (typically those with over 10 employees on a typical day) must file BOTH Form 8027 and Form 8027-T (Transmittal of Employer's Annual Information Return of Tip Income). Submitting only Form 8027 results in an automatic rejection by the IRS. To avoid this, confirm your establishment's employee count and file the full set of forms through the IRS FIRE system if required.
2. Reporting Incorrect Gross Receipts or Tip Totals
Entering annual gross receipts from all food and beverage sales or reported tip totals that don't match your establishment's payroll records is a common error. Discrepancies trigger IRS notices and potential audits. To avoid this, reconcile the amounts on Form 8027 with your annual sales reports from your point-of-sale system and your Form 941 or 944 filings before submission.
3. Using the Wrong Establishment Name or EIN
Filing under a DBA (Doing Business As) name without the correct legal entity name, or using an old or incorrect Employer Identification Number (EIN), causes processing failures. The IRS cannot match the return to your business account. Always use the exact legal business name and EIN that appear on your IRS confirmation letter (CP 575) or recent tax notices.
Skip the Paperwork on Your Employer's Annual Information Return of Tip Income
ApronPrep auto-fills 40 of 48 fields from one compliance interview.
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Employer's Annual Information Return of Tip Income by City in Illinois
| City | Fee Range | Timeline |
|---|---|---|
| Aurora | ||
| Chicago | ||
| Rockford |
Timeline: Varies
Gather and Verify Monthly Tip Records
Compile IRS Form 8027 from each of your tipped employees for the tax year and reconcile them with your business's payroll records. You need the finalized totals from all 8027s, as well as your gross receipts from food and beverage sales if the establishment is large enough to be required to file Form 8027 itself. The most common delay here is incomplete data from employee forms or mismatched totals between employee reports and employer records.
Complete IRS Form 8027 for the Employer
Fill out the employer's annual IRS Form 8027, using the aggregated data from the individual employee forms. You will need your EIN, establishment address, and annual totals for gross receipts, charged tips, and reported tips. In Aurora, Illinois, you must use the 2026 revision of the form. Errors in transferring totals from the employee forms to the employer form are a leading cause of IRS notices.
File with the IRS by February 28
Submit the completed employer's Form 8027 to the IRS by the statutory deadline of February 28th (or March 31st if filing electronically). While this is a federal form with no separate Illinois or Aurora filing, you must keep a copy for state audit purposes. Filing after the deadline can trigger automatic penalties from the IRS, starting at $50 per form per month, even if no tax is owed.
Other Requirements You'll Need
This is one of 13 requirements for opening a restaurant in Illinois.
ADA Compliance Self-Certification
federal
Alarm System Permit/Registration
local
Alcohol Server Training Certification (BASSET)
state
Annual Report Filing
state
See all co-required forms and how they connect to your compliance dossier.
See All RequirementsProcessing times vary as this is a federal form reported directly to the IRS, not a local Aurora permit. The IRS does not provide a standard processing window for receiving this return; it is primarily a filing and record-keeping requirement. Timelines for related local approvals, like your City Business License/Registration, can impact your overall opening schedule.
There is no direct government filing fee to submit IRS Form 8027 to the federal government. However, failure to file can result in significant IRS penalties. You must also maintain compliance with local Aurora fees, such as those for your annual Annual Report Filing with the state. Not legal advice — verify specific obligations with the IRS and Illinois Department of Revenue.
No, this IRS form cannot be 'transferred.' It is an annual report of tip income for a specific Employer Identification Number (EIN) and tax year. If you move your business, you must file the form for the old location for the period you operated there and begin using the new address for subsequent filings. A change of address must also be reported to local authorities for permits like your City Business License/Registration.
You must file IRS Form 8027 annually, by the last day of February each year for the previous calendar year. There is no 'renewal' in the traditional permit sense; it is a recurring federal tax filing obligation. This annual cycle is separate from other periodic requirements, such as your state Annual Report Filing. Always confirm the current year's deadline on the IRS website.
There is no physical inspection for this federal paperwork. Compliance is verified through IRS audits of your payroll tax records, tip allocation reports, and Form 8027 filings. An audit would review your books to ensure reported tip income matches employee records and allocated amounts. Maintaining accurate records is critical, as discrepancies can trigger audits and penalties related to payroll and your Application for Employer Identification Number. Not legal advice.
About This Data
This guide is generated from ApronPrep's compliance dossier system, which uses 53 parallel AI authority experts to discover requirements, then downloads actual forms and generates field-level intelligence for each one.
For Illinois specifically, we have analyzed compliance dossiers for 3 cities (Aurora, Chicago, Rockford), generating Rich FILs (Form Intelligence Layers) with 48 form fields analyzed for this requirement. Fee data is sourced from actual county department fee schedules, not estimates.
Our data is verified against official government sources and updated when regulatory changes are detected. If you find an error, please report it — accuracy is our core commitment.
Sources
- Internal Revenue Code (Title 26)
This Form Is One of 60+ Requirements.
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