In which box on Form W-2 should allocated tips be reported?

Allocated tips should be reported in Box 8 on Form W-2. This specific box is designated for reporting tips that have been allocated to employees under the employer's tip allocation plan, rather than actual wages or earnings.

Box 8 is important because it provides a clear distinction between the tips that employees have received directly and those that are allocated. Employers must allocate tips when certain conditions are met, especially in industries like restaurants where tipping is common. By reporting allocated tips separately in Box 8, it allows for a more accurate assessment of an employee’s income and helps the IRS track this type of compensation effectively.

The other options involve different boxes that cater to other forms of income or payroll-related figures, which do not accurately reflect the purpose of Box 8 for allocated tips.