What this line means
The smaller of your total tips subject to Social Security tax (line 7) or your remaining Social Security wage base (line 10). This is the actual amount of tip income on which you owe Social Security tax at the employee rate of 6.2%. If your wages and tips already exceeded the Social Security wage base, this amount is zero.
Does this apply to you?
Easy to overlook
This line can be zero even if you have unreported tips If your regular wages plus reported tips already exceeded the $176,100 Social Security wage base, line 10 is zero, which makes line 11 zero. You owe no additional Social Security tax on unreported tips in this case. You still owe Medicare tax on those tips (line 13), but Social Security tax stops at the wage base. 1 IRS Form 4137 instructions — Line 11
Partial-year workers rarely hit the cap The wage base applies to the full calendar year. If you worked only part of the year or held lower-wage tipped positions, your total earnings are well below the cap. In this case, line 11 equals line 7 — all your tips are subject to Social Security tax. The cap only matters for high earners or people with multiple income sources. 2 IRS Publication 531 — Reporting Tip Income
Watch out for this
Entering line 7 on line 11 without comparing it to line 10. The instructions require you to enter the smaller of line 7 or line 10. If your remaining wage base (line 10) is less than your total tips (line 7), entering the full tip amount on line 11 overstates the Social Security tax you owe. Always compare both lines.
Footnotes
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IRS Form 4137 Instructions, Line 11. https://www.irs.gov/instructions/i4137 ↩
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IRS Publication 531, Reporting Tip Income. https://www.irs.gov/pub/irs-pdf/p531.pdf ↩