FICA Tip Tax Credit for Restaurants (IRS §45B)
Restaurants and food-service businesses may be eligible to recover a portion of the employer payroll taxes (FICA) paid on employee-reported tips.
Santa Cruz Financial offers a simple, confidential way to determine whether your business qualifies—and if it does, our licensed CPA partner completes the calculations and filing process.
What is the FICA Tip Tax Credit?
The FICA Tip Credit (IRS §45B) is a federal tax credit that may allow eligible food & beverage businesses to claim a credit based on the employer share of Social Security and Medicare (FICA) taxes paid on employee-reported tips.
Many businesses overlook this credit—especially when payroll and tax filings are handled year-to-year without a detailed review of tip reporting and wage data.
Who May Qualify?
You may be a strong candidate if:
- You operate a restaurant or food & beverage business
- You have W-2 employees who receive tips (tipping is customary)
- Tips were reported and your business paid FICA taxes on those tips
- Your business operated in one or more of the last three tax years
(commonly 2022–2024)
Not sure? That’s common. We can review your situation quickly and confidentially.
How the Process Works
We keep this straightforward and low-burden for you and your team:
- Initial Eligibility Review
We ask a few basic questions and confirm whether it makes sense to proceed. - IRS Authorization (if moving forward)
You’ll e-sign IRS authorization documents so the CPA can access the necessary tax information. - CPA Calculates & Prepares Filings
The licensed CPA partner performs the full credit calculation and prepares the required filings/amendments. - Submission & IRS Processing
The filings are submitted and tracked through the normal IRS process. - Refund Issued (if approved by the IRS)
Refund timing varies, but many businesses receive funds within typical IRS processing windows.
What You Can Expect
- No disruption to daily operations
- A clear, documented review process
- Work completed by a licensed CPA
- A conservative, compliance-first approach
- Transparent communication throughout
Fees
In many cases, this service is offered on a contingency basis (fees are paid from the refund if a refund is issued). Fee terms are provided in writing before you proceed.
What We’ll Need (Typical Items)
To estimate eligibility and support the CPA’s calculation, we may request:
- Business name, entity type, and EIN
- Payroll provider and tip reporting method
- Summary payroll/tip data by year
- Prior-year tax filings (as applicable)
Don’t worry—if you don’t have everything handy, we’ll guide you step-by-step.
Request a Confidential Eligibility Review
If you’re a restaurant or food-service operator and want to see if you may
qualify under IRS §45B, start here.
Frequently Asked Questions
Is this the same as the Employee Retention Credit (ERC)?
No. The FICA Tip Credit is a separate provision under IRS §45B focused on employer-paid FICA taxes on employee-reported tips.
Do I need to change payroll providers?
No. This review and filing process can typically be completed regardless of payroll provider.
How long does it take?
Timing varies by business complexity and IRS processing. We’ll give you an expected range once the CPA reviews your case.
Will this increase my audit risk?
Any amended filing can be reviewed by the IRS. Our approach is documentation-driven and compliance-first, and the CPA will advise on best practices.
Do you provide tax advice?
Santa Cruz Financial does not provide tax advice. All tax analysis, calculations, and filings are completed by a licensed CPA partner.
Important Disclosure
Santa Cruz Financial is not a CPA firm and does not provide tax or legal advice. Any tax-related work, analysis, calculations, and filings are performed by a licensed CPA partner. Eligibility and results are not guaranteed and are subject to IRS rules and review.
Let’s Get Started
Request a Confidential Eligibility Review
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