Count gross wages or salaries paid to an employee as income in the month they are expected to be received. Count wages held at the request of the employee as income in the month the wages would have been paid.
The IRS requires employees to use IRS Form 4070 to report their tips to their employer. This form can be used to verify tips that are not included on the employee's wage stubs. If no verifications are available, accept the client's statement about the
amount of tip income.
For persons working under contract, verify the contract's specific provisions. Verification may be obtained from the employer or the union.
For Marines living on a military base or at a reserve center, the Basic Allowance for Quarters (BAQ) is not received even though it appears on the Leave and Earnings Statement (LES). To disregard the BAQ, require the FS unit to provide a statement
indicating the Marine is not receiving the BAQ. The statement must be signed by the Marine's commanding officer. If a Marine does not live on base, count the BAQ as income.