What is the Section 45B FICA tip credit floor?

The Section 45B FICA tip credit floor is the fixed hourly wage used to determine which employee tips qualify for the employer FICA tip credit. Set at $5.15 per hour, the 2007 federal minimum wage is frozen into the statute; it is not the current minimum wage. Tips that bring an employee's cash wages up to $5.15 per hour are not creditable, while tips above that level are creditable at the employer's 7.65% FICA rate. The credit is claimed on Form 8846 and flows into the general business credit, where any unused amount can carry forward. Seasonal staffing pairs with the Hiring kids strategy.