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Understand the implications of the proposed IRS Tip Reporting Program and access our updated payroll charts on the Unemployment State Information Data Exchange System.
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New IRS Tip Reporting Program Gives Same Liability Protections, Updated for Service Industry Technology Advances
Who needs to know: Small and large employers, payroll professionals, tax professionals, CPAs.
The IRS is proposing to establish a voluntary tip reporting program for employers in the service industry that will replace the current programs.
The Service Industry Tip Compliance Agreement (SITCA) program is designed to take advantage of advancements in POS (point of sales) systems and time and attendance systems, as well as the use of electronic payment settlement methods to improve tip reporting compliance and to decrease taxpayer and IRS administrative burden.
- While this is still a proposal, there are time-sensitive actions that employers may wish to take. Public comment is sought on this proposed program no later than May 7, 2023. Earlier programs will continue to apply with respect to participating employers until publication of a final Rev. Proc., but the IRS won’t enter into any new TRAC, TRDA and EmTRAC agreements with any employers that don’t already have agreement as of March 8, 2023.
Checkpoint Edge resources:
| Primary sources: | Notice 2023-13, 2023-6 IRB 454, 02/03/2023 |
| News: | IRS Issues Proposal to Establish Voluntary Tip Reporting Program for Employers (02/06/2023) |
| Expert guidance: | Payroll Guide 3800 and Payroll Guide 23,355 provide information on the current tip reporting programs. |
Updated Charts on the Unemployment State Information Data Exchange System
Who needs to know: Employers and their advisors
Several types of unemployment data are required to be exchanged with an employer and a state workforce agency (SWA). More than 10 years ago, the UI SIDES program was created to help employers electronically exchange unemployment data with SWAs to improve reporting and help employers save when it comes to unemployment-related expenses.
Easily see which states participate in the UI SIDES program and which of the six unemployment data exchange each state participates in by using our updated payroll charts!
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