Tax credit respecting the reporting of tips

If you or a partnership of which you were a member carried on a business in the restaurant and hotel sector in Québec, you may be entitled to a refundable tax credit for the employer contributions that you or the partnership paid to the federal and Québec governments with regard to

• the tips the employees received in the course of their duties (or the tips that were allocated to them);
• the portion of earned vacation pay that was related to the tips.

The credit may also be claimed with respect to the employer contributions paid with respect to tips received by an employee in cases where you control substantially all of the employee's tips because service charges are added to the customer's bill. In this case, the following conditions must be met:

• The tip required of the customer is, in substantially all cases, equal to at least 10% of the sales on which a tip can be calculated.
• The customer is informed that the tip is compulsory and is made aware of the percentage charged.
• Any tip-sharing arrangement in effect is administered by you.

The employer contributions that give entitlement to this credit are those paid under the following laws:

• the Act respecting the Québec Pension Plan
• the Act respecting the Régie de l'assurance maladie du Québec
• the Employment Insurance Act
• the Act respecting labour standards
• the Act respecting industrial accidents and occupational diseases

To claim the tax credit, complete form TP-1029.8.33.13-V, Tax Credit with Respect to the Reporting of Tips.