Your Bar Is Sitting On Unclaimed Money

Yes. This is an established federal tax credit under IRS Section 45B. It has existed for decades — most businesses just don't know it exists or assume their CPA already claimed it.

No. It is a tax credit refund — not a loan. Once it's recovered, it's yours. It never has to be repaid.

Nothing. There is no upfront cost and no fee if no credit is recovered. The only fee is 25% of whatever refund is actually received.

No. You can continue working with your existing CPA and payroll provider. TipTaxRefund.org handles this process independently.

In many cases, businesses can recover missed credits for up to 3 prior tax years.

The FICA Tip Credit, established under IRS Section 45B, is a federal tax credit that allows bars, restaurants, nightclubs, and other tipped-employee businesses to recover the employer-paid Social Security and Medicare (FICA) taxes on tips received by their employees. Because employers are legally required to pay FICA taxes on tip income above the federal minimum wage, the IRS created this credit to offset that cost. It is a permanent part of the federal tax code and has been available since 1993.

The credit is calculated at 7.65% — the combined employer Social Security (6.2%) and Medicare (1.45%) rate — applied to the tips employees receive above the federal minimum wage. The higher the tip volume and number of tipped employees, the larger the credit. A bar or nightclub doing strong nightly tip volume can accumulate tens of thousands of dollars in recoverable credits per year.

Yes. Businesses can amend prior-year tax returns to claim missed FICA Tip Credits for up to three prior tax years. This means a nightclub or bar that was unaware of the credit can still recover what they were owed retroactively by filing amended returns with the IRS.

Most owners are simply unaware it exists. Others assume their CPA or payroll provider already claimed it — but many accountants who don't specialize in hospitality tax never flag it. The credit requires specific payroll data and tip reporting to calculate correctly, which is why it gets overlooked during standard tax preparation.

No. The FICA Tip Credit is a legitimate, long-standing federal tax credit under IRS Section 45B. Claiming it is standard tax compliance for hospitality businesses and does not increase audit risk when filed correctly with proper documentation.

Any business where tipping is customary and employees report tip income qualifies. This includes bars, nightclubs, full-service restaurants, hotels, resorts, casinos, salons, spas, catering companies, and other hospitality businesses. The key requirement is that employees receive tips and those tips are reported for payroll tax purposes.

The timeline varies depending on how many years are being amended and the IRS's current processing times. In general, businesses can expect the process from document collection to receiving a refund or credit to take several months. Amended returns currently take the IRS longer to process than original returns.

No. The FICA Tip Credit and the Employee Retention Credit are two separate federal tax programs. The ERC was a temporary COVID-era credit that has since ended. The FICA Tip Credit under IRS Section 45B is a permanent part of the tax code and is still fully available to qualifying hospitality businesses today.