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Employee tip tax reporting: does Square supply a 1099 for this or do I create one on my own?

Does Square supply a 1099 for employees that make tips from credit cards? I do not want to be the one that pays taxes on these tips since it's not my income. I cannot find anything about this in the help center. Any suggestions on how I can handle this? Thanks.

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Admin

Hello, @CoffeeNerd—welcome to the seller community.

 

It sounds like you're set up with Square Payroll, correct? If so, have a look at the video demonstration in this thread for more details on declaring tips for your employees and ensuring proper tax reporting: My new hire is getting paid commission and gratuities. How do I add tips to payroll?

 

Hope this helps get you in the right direction. If you have any other questions or you'd like a member of our Payroll Team to take a deeper dive into your account, get in touch directly.

️ Tom | he/him
Seller Community Manager | Square, Inc.
Find step-by-step help in our Support Center
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Tom thanks for your reply. I do NOT have Square payroll; I use another service for payroll. Is there a way to account for the employee tips or a way to print a report/1099 for them to use on thier own taxes? I was able to make a custom report for tips but there is not a way to print it or export it. Kinda odd.

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Admin

Got it. Thanks for your reply, @CoffeeNerd. At this time, 1099 reports are not included with Employee Management, but you can export/print a report of tips collected by doing the following:

  1. Head over to your Sales tab.
  2. Select Employee Sales > choose appropriate date range.
  3. Export > Summary CSV.
  4. A report will download to your computer. From there, you can view and print tip amounts for each employee using Excel or Numbers.

We've also partnered with a handful of accounting and tax applications that may offer additional assistance with generating the reports you need. To view, go to your App Marketplace tab > Accounting & Tax.

 

Hope this helps get you in the right direction. If anything else comes up, please let me know and I'll be happy to take another look!

️ Tom | he/him
Seller Community Manager | Square, Inc.
Find step-by-step help in our Support Center
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This helps yes, but I think I need to check with my accountant on if I actually need to give my employees another W2 or 1099 for these earnings. 

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I have a similar question.  I see the tip amounts on the detail for each deposit.  However, I do not see a way to generate a report for just those amounts.

 

And since those are shown as part of the total sale - even though given to the employee - that means the tip amounts are part of gross sales reported on the 1099-K correct?

 

I'm trying to the report to pull the amount out and report them on the employees pay as "reported tips".  One employee has a really hard time with this as she doesn't want anything about tips on her paycheck?  Don't we have to do that?

 

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Admin

Hey @rev1, thanks for checking in. We aren't able to offer tax advice, though tip amounts are included with the Transactions CSV if you're not using Employee Management and you need to review what was collected throughout the year. For more information, have a look here: Download Your Transactions History.

 

Hope this helps get you in the right direction—you might want to touch base with a tax professional for more on how to proceed with the reported tips questions.

️ Tom | he/him
Seller Community Manager | Square, Inc.
Find step-by-step help in our Support Center
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Is there a way to get a report of tips? I would like to see what my customers typically tip to help me choose my preset amounts.

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Admin

Yes @SMWCheck this out.

Bea_
Beta Community Manager, Square
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Hmmm not what I am looking for. I would like to know the most often used tip percentage. Is there a way to look at the tip "categories" used?

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Admin

Oh I see. Thanks for clarifying. Unfortunately there's not a way to pull that info. I can see how that could be useful information to see so I can pass this feedback along to our team. @SMW

Bea_
Beta Community Manager, Square
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Darn it. Yes very. Ok thank you so much.

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