Employer's Annual Information Return of Tip Income in Springfield, Massachusetts (2026)
Fail to file this IRS form, and you face penalties for every tipped employee—plus an increased risk of a payroll audit that can disrupt your business for months. In Springfield, Massachusetts, this is the Employer's Annual Information Return of Tip Income (IRS Form 8027), filed annually with the Internal Revenue Service to report all cash and credit card tips. Key facts:
- 48 fields to complete—ApronPrep auto-fills 40
- $0–$0 government filing fees (no cost to submit the form itself)
- Varies processing timeline (submission by the IRS deadline is critical)
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 mandatory federal tax filing requirement for certain businesses. The legal basis is Internal Revenue Code (Title 26), specifically sections 6041 and 6053, which are enforced by the Internal Revenue Service (IRS). While Springfield, Massachusetts, has no additional local ordinance for this federal report, adherence is required for any employer with tipped employees to comply with national tax law, regardless of location.
For restaurant owners in Springfield, failing to file this form on time triggers a cascade of penalties and practical consequences that impact your business operations directly.
- Financial penalties: Failure-to-file penalties accrue at 5% of the unpaid tax per month, up to 25% maximum. Failure-to-pay penalties are 0.5% of the unpaid tax per month. Interest is charged on all unpaid amounts from the due date.
- Increased scrutiny: Missing or late filings can flag your business for a payroll tax audit by the IRS, which can expand to review all wage and tax reporting.
- Operational and legal risk: Significant underreporting or patterns of non-compliance can lead to criminal investigation for tax evasion or fraud. It can also create complications with business licensing renewals and negatively impact your standing with lenders or potential buyers.
Legal code: Internal Revenue Code (Title 26)
Recent update: As of tax year 2025, the IRS no longer accepts paper-filed Forms 8027; all Employer's Annual Information Returns of Tip Income must be submitted electronically through the IRS FIRE system, with a specific mandate for certain large food and beverage establishments.
Who Needs a Employer's Annual Information Return of Tip Income?
| Type | Required | Notes |
|---|---|---|
| Restaurant (Full-Service) | Required | Required under IRS rules if tipped employees receive $20 or more in tips in any month; this form reports allocated tips to the IRS and SSA. |
| Bar / Nightclub | Required | Required under IRS rules if tipped employees receive $20 or more in tips in any month; this form reports allocated tips to the IRS and SSA. |
| Food Truck | Required | Required under IRS rules if tipped employees receive $20 or more in tips in any month; this form reports allocated tips to the IRS and SSA. |
| Coffee Shop / Café | Not Required | Typically exempt as operations in this category often do not customarily have tipped employees; required only if tipping is customary and employees receive $20+ in tips in a month. |
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 if you are submitting this Form 8027 to correct or update a previously filed return for the same tax year.
COMMON MISTAKE: Checking this box for an initial annual filing, which can cause the IRS to flag the return as a duplicate or error.
Final Return
checkboxCheck this box if you are going out of business (ceasing operations) and this is the last Form 8027 you will file for this establishment.
COMMON MISTAKE: Checking this box for a standard annual filing, which may incorrectly signal to the IRS that the business has closed, affecting future filings.
Type: Alcoholic Beverages
checkboxCheck this box if your establishment's primary business is serving alcoholic beverages, even if food is also served.
COMMON MISTAKE: Selecting multiple establishment type checkboxes, as the IRS expects only one primary type to be selected per return.
Type: Meals Other Than Evening
checkboxCheck this box if your establishment primarily serves meals during breakfast, lunch, or brunch hours.
COMMON MISTAKE: Incorrectly selecting this for a dinner-focused restaurant, which can misrepresent the establishment's tipping patterns for IRS review.
Type: Evening and Other Meals
checkboxCheck this box if your establishment serves meals during both evening and non-evening hours (e.g., lunch and dinner).
Type: Evening Meals Only
checkboxCheck this box if your establishment exclusively serves meals during the evening/dinner period.
Accepts Credit Cards: Yes
checkboxCheck this box if your establishment accepts credit or debit card payments, as this impacts the tip reporting and allocation methodology.
COMMON MISTAKE: Checking both 'Yes' and 'No'; you must select only one, as inconsistent data here can invalidate the allocation calculations.
Accepts Credit Cards: No
checkboxCheck this box only if your establishment operates on a strictly cash-only basis for all transactions.
COMMON MISTAKE: Incorrectly selecting 'No' if you accept cards, which triggers an IRS mismatch when card tip amounts are reported elsewhere.
Line 7c: Allocation Method - Good Faith Agreement
checkboxCheck this box if you allocate tips among employees based on a written, signed agreement between the employer and employees, as permitted under IRS rules.
COMMON MISTAKE: Selecting this without having the required written agreement in place, which is a common trigger for IRS audit inquiries.
Line 7b: Allocation Method - Gross Receipts
checkboxCheck this box to use the IRS-prescribed gross receipts method for allocating tips when reported tips fall below 8% of sales.
COMMON MISTAKE: Incorrectly calculating the 8% threshold or selecting this method when the Good Faith Agreement method applies, leading to mathematical errors.
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. Incorrectly Reporting or Missing Employee SSNs
Entering an employee's name with a typo, using a Taxpayer Identification Number (TIN) instead of the correct Social Security Number (SSN), or leaving the SSN field blank. The IRS uses this data to match tip income to individual tax records; mismatches trigger 'CP2100/CP2100A' notices to both you and the employee, requiring correction and potential backup withholding. Double-check each SSN against the employee's Form W-4 or Social Security card before filing.
2. Misunderstanding the 'Tips Reported' vs. 'Tips Allocated' Fields
Failing to properly distinguish between Column 1 (tips the employee reported to you) and Column 7 or 8 (tips you allocated because total reported tips were less than 8% of gross receipts). Entering the same number in both columns or leaving allocation columns blank when required leads to IRS inquiries. If your establishment operates under the 8% rule, you must calculate and report allocated tips separately for any employee whose reported tips fall short.
3. Failing to Report All Eligible Employees
Omitting employees who worked only part of the year, new hires, or staff in roles you mistakenly believe don't receive tips (like bussers or bartenders). Form 8027 requires a line for every employee who received $20 or more in tips in any month during the tax year. Missing employees results in an incomplete filing, which the IRS will reject, adding 4-6 weeks to your compliance timeline while you gather the missing data and resubmit.
Skip the Paperwork on Your Employer's Annual Information Return of Tip Income
ApronPrep auto-fills 40 of 48 fields from one compliance interview.
No credit card required
Employer's Annual Information Return of Tip Income by City in Massachusetts
| City | Fee Range | Timeline |
|---|---|---|
| Boston | ||
| Springfield | ||
| Worcester |
Timeline for Filing Form 8027 with the IRS
Gather Annual Tip Allocation Data
Compile your Form 8027 worksheets and the Annual Tip Allocation Statements (Form 8027-A) for every tipped employee from the previous calendar year. You need the total gross receipts from food and beverage sales, total tips reported, and total hours worked by tipped employees. Most rejections occur due to math errors or missing supporting worksheets, so double-check your totals before proceeding.
Complete IRS Form 8027
Fill out the current-year IRS Form 8027, Employer's Annual Information Return of Tip Income. This involves transferring the compiled data into specific sections for gross receipts, charged tips, and tip allocations. Ensure you have your Employer Identification Number (EIN) ready. ApronPrep auto-fills key fields from your payroll data to reduce manual entry errors.
File Electronically via the IRS FIRE System
Submit your completed Form 8027 electronically through the IRS Filing Information Returns Electronically (FIRE) system. The IRS requires electronic filing for information returns like the 8027. You'll need to obtain a FIRE Transmitter Control Code (TCC) in advance if you don't have one. Paper submissions are not accepted and will result in penalties.
Other Requirements You'll Need
This is one of 13 requirements for opening a restaurant in Massachusetts.
ADA Compliance Self-Certification
federal
Alarm System Permit/Registration
local
Alcoholic Beverages Local Retail License
local
Allergen Awareness Training Certificate
state
See all co-required forms and how they connect to your compliance dossier.
See All RequirementsThe processing timeline is not defined by a local Springfield authority but by the IRS's national processing schedule for Form 8027. The IRS typically processes these forms as part of their annual tax return review cycle. For specific status inquiries or current processing times, contact the IRS directly or check the 'Where's My Amended Return?' tool on the IRS website.
There is a $0 government filing fee for submitting IRS Form 8027, as confirmed by the IRS fee schedule. However, failure to file or filing an inaccurate return can result in significant IRS penalties. It's critical to ensure your Annual Report Filing with the state is also completed, as this maintains your business's good standing.
No, you cannot 'transfer' this federal return. A new filing is required for each tax year, and it's tied to your Employer Identification Number (EIN). If you move your business location, you must update your address with the IRS and ensure your Application for Employer Identification Number records are current. The return itself is an annual snapshot of operations at the location where tipped employees worked.
You must file it annually. IRS Form 8027 is due by the last day of February each year for the preceding calendar year. There is no 'renewal' in the traditional permit sense; it's a recurring annual filing obligation for any establishment where tipping occurs. This is distinct from local licenses, like a Springfield Alcoholic Beverages Local Retail License, which have their own renewal cycles.
There is no physical 'inspection' for this IRS form. Compliance is verified through an audit of your submitted records. The IRS may review your payroll registers, tip allocation records, and related documents to ensure the figures on Form 8027 match your other tax filings. Maintaining accurate internal records is your best defense against an audit. Not legal advice — verify procedures with the IRS.
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 Massachusetts specifically, we have analyzed compliance dossiers for 3 cities (Boston, Springfield, Worcester), 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)
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