Fillable Printable De 231T
Fillable Printable De 231T
De 231T
DE 231T Rev. 6 (1-11) (INTERNET) Page 1 of 2 CU
TIPS
* Includes Paid Family Leave (PFL).
Tips received by the employee from the customer in
the form of cash, check, or any other monetary item
of exchange are wages subject to Unemployment
Insurance (UI), Employment Training Tax (ETT), State
Disability Insurance* (SDI), and California Personal
Income Tax (PIT) if they total $20 or more in a month,
provided the employee reports the amount in a written
statement furnished to the employer.
When tips are received by the employee from the
employer, such as banquet tips or service charges,
the amount is considered regular wages and is fully
subject to UI, ETT, SDI, and PIT withholdings. Subject
tips should be combined with regular wages on payroll
reports (in Items G “Total Subject Wages” and H “PIT
Wages” on the Quarterly Contribution Return and
Report of Wages [Continuation] [DE 9C]) led with the
Employment Development Department (EDD).
HOW TO REPORT TIPS
Use the following chart to determine reporting
responsibility:
RESPONSIBLE
PERSON
ACTION
Employee • Upon receiving cash tips of $20
or more during a calendar month,
shall report all cash tips to their
employer.
• Complete an Employee’s Report
of Tips to Employer (federal
Form 4070) or prepare a written
statement, in duplicate, and
provide the following information:
- Employee’s name, address,
and social security number.
- Employer’s name and address.
- Calendar month or other period
covered by the report.
- Total amount of tips received.
- Date of the report.
- Date and employee signature.
RESPONSIBLE
PERSON
ACTION
Employee
Employer
• Give the Form 4070/written
statement to their employer on
or before the 10th day of the
month following the month in
which the tips were received.
• Upon termination of
employment, the employee
must furnish a statement of
tips received that have not
previously been reported to his
or her employer.
• Upon receipt of the employee’s
tip statement, the employer
signs and dates both copies
of the document, retains
the original, and returns the
duplicate to the employee.
• Since tips are considered
earned at the time the written
statement is furnished to the
employer, the employer reports
the tips on the DE 9C covering
the date the employer receives
the statement.
Example (1) An employee
received $40 in tips in the month
of May. The employee reports
the tips to the employer on
June 10. The tips received in
May would be reported on the
second quarter DE 9C.
Example (2) In the example
above, the employee received
the $40 in the month of June
and reports the tips to the
employer on July 10. The tips
received in June would be
reported on the third quarter
DE 9C.
DE 231T Rev. 6 (1-11) (INTERNET) Page 2 of 2 CU
ADDITIONAL INFORMATION
For further assistance, please contact the Taxpayer
Assistance Center at (888) 745-3886, or visit the
nearest Employment Tax Ofce listed in the California
Employer’s Guide (DE 44), or access EDD’s Web site
at www.edd.ca.gov/Ofce_Locator/.
The EDD is an equal opportunity employer/program.
Auxiliary aids and services are available upon request
to individuals with disabilities. Requests for services,
aids, and/or alternate formats need to be made by
calling (888) 745-3886 (voice), or TTY (800) 547-9565.
This information sheet is provided as a public service and is intended to provide nontechnical assistance. Every attempt has been made
to provide information that is consistent with the appropriate statutes, rules, and administrative and court decisions. Any information that
is inconsistent with the law, regulations, and administrative and court decisions is not binding on either the Employment Development
Department or the taxpayer. Any information provided is not intended to be legal, accounting, tax, investment, or other professional advice.
RESPONSIBLE
PERSON
ACTION
Employer
(cont.)
be issued in quadruplicate and
distributed as follows:
- Original and one copy issued
to the employee.
- Second copy attached to the
Quarterly Contribution Return
and Report of Wages (DE 9)
when it is submitted to EDD.
- Third copy retained in the
employer’s record.
• If the employer estimates or
allocates the amount of tips
received by the employee, the
employer will reconcile the
estimation/allocation with the
amount of tips actually reported
by employee, adjusting for any
differences between the amount
of SDI and PIT withheld and the
amount actually due. On the
DE 9C for the quarter, the
employer includes the actual
amount of tips reported by the
employee.
RESPONSIBLE
PERSON
ACTION
Employer
(cont.)
Example (3) As in example (2),
the employee received $40 in
June; however, the employee
reported the $40 in tips for that
month on June 30. The tips
received would be reported on
the second quarter DE 9C.
• The employer combines the
reported tips with the employee’s
regular wages and reports the
total in Items G and H on the DE
9C.
• The employer withholds
SDI contributions and PIT
withholdings on the employee’s
reported tips from one of the
following:
- Wages payable at the time the
tip statement is led by the
employee.
- Wages that become payable
later in the same calendar year
that the tip statement is led.
- The employee directly, at the
time the tip statement is led or
later in the same calendar year.
• If unable to collect the SDI and
PIT withholding due on reported
tips (for example, the wages
to be paid are insufcient),
the employer can provide the
employee with a Statement
of Amount Due From Worker
(DE 370) available from EDD.
Completion of the DE 370 or a
similar statement relieves the
employer of the uncollected
employee liability. The DE 370
or similar statement must
