NOCTI 1288 Travel And Tourism Practice Test

By law, when a restaurant serves receives a monetary tip (gratuity), the server must

Report and claim the tip as income Donate the tip to charity Split tips with non-tipped staff Return tip to customer

Correct Answer:

Report and claim the tip as income

Explanation:

Tips are considered income and must be reported for tax purposes. A server must report and claim the tip as income so taxes—federal, Social Security, and Medicare—are properly withheld and paid. This tip money belongs to the server, and reporting it keeps earnings and payroll accurate. Donating tips to charity isn’t required by law, and returning tips to customers isn’t a legal obligation. Tip pooling can occur, but that’s a policy choice within the restaurant, not a universal legal requirement.

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