When an employer allocates tips, which of the following statements is TRUE?

Comprehensive and Detailed Explanation:Employersmust allocate tipsif the total reported tips areless than 8% of gross receiptsfor establishmentswhere tipping is customary.

Allocated tips are reported on Form W-2, Box 8 (Option C)butare NOT subject to withholding.

Option A is incorrectbecause allocated tipsare not subject to automatic withholding unless voluntarily reported by the employee.

Option B is incorrectbecauseemployers are responsible for accurate tip reporting.

Option D is incorrectbecause tip allocation rulesrequire reporting when applicable.