Tip Income…Cash, Credit, and Common ‘Cents’
While it’s easy to verify and collect source documents for common forms of income such as employment, it’s critical to use good judgment and common sense when processing income for service-industry employees. We must consider the industry in which they work and if tips or gratuity is customary. We must be mindful of all sources of income; no amount is too big or too small!
Common industries for tips/gratuities include restaurant and bar employees (such as servers, delivery drivers, and bartenders), passenger driving services(such as taxi drivers, Uber and Lyft drivers), grocery/food delivery services(such as Shipt, UberEats, DoorDash, etc.), salon and nail service providers(such as barbers, stylists, technicians, and wax specialists), pet grooming providers, entertainment(such as musicians, dancers, photographers, etc.). It is assumed that applicants working in the above type of industries will earn tips and should be asked to complete a statement certifying the amount of cash tips and credit tips they receive and the frequency. Amounts divulged in this statement may conflict with the employer’s statements and the highest figure should be used for the most conservative approach.
Additional support for tip income may include sales receipts, income tax submissions, and earnings reports or dashboard reports clearly identifying the amount of gratuity applied.